Stock Analysis

The recent 11% gain must have brightened Top Key Executive Rani Zim's week, Rani Zim Shopping Centers Ltd's (TLV:RANI) most bullish insider

TASE:RANI
Source: Shutterstock

Key Insights

To get a sense of who is truly in control of Rani Zim Shopping Centers Ltd (TLV:RANI), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit ₪468m market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Rani Zim Shopping Centers.

Check out our latest analysis for Rani Zim Shopping Centers

ownership-breakdown
TASE:RANI Ownership Breakdown May 9th 2024

What Does The Institutional Ownership Tell Us About Rani Zim Shopping Centers?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Rani Zim Shopping Centers does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Rani Zim Shopping Centers' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TASE:RANI Earnings and Revenue Growth May 9th 2024

We note that hedge funds don't have a meaningful investment in Rani Zim Shopping Centers. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Rani Zim Shopping Centers' case, its Top Key Executive, Rani Zim, is the largest shareholder, holding 54% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 3.2% of the stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Rani Zim Shopping Centers

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Rani Zim Shopping Centers Ltd. This means they can collectively make decisions for the company. Given it has a market cap of ₪468m, that means they have ₪267m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rani Zim Shopping Centers. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Rani Zim Shopping Centers better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Rani Zim Shopping Centers (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Valuation is complex, but we're helping make it simple.

Find out whether Rani Zim Shopping Centers is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.