Insiders with their considerable ownership were the key benefactors as Summit Real Estate Holdings Ltd (TLV:SMT) touches ₪2.9b market cap

Key Insights

• Significant insider control over Summit Real Estate Holdings implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 59% ownership
• Institutions own 35% of Summit Real Estate Holdings

To get a sense of who is truly in control of Summit Real Estate Holdings Ltd (TLV:SMT), it is important to understand the ownership structure of the business. With 49% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by ₪203m last week.

In the chart below, we zoom in on the different ownership groups of Summit Real Estate Holdings.

Check out our latest analysis for Summit Real Estate Holdings

What Does The Institutional Ownership Tell Us About Summit Real Estate Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Summit Real Estate Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Summit Real Estate Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Summit Real Estate Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zohar Levy with 48% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 8.9% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Summit Real Estate Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Summit Real Estate Holdings Ltd. Insiders have a ₪1.4b stake in this ₪2.9b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Summit Real Estate Holdings. 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 Summit Real Estate Holdings better, we need to consider many other factors. For instance, we've identified 3 warning signs for Summit Real Estate Holdings (2 shouldn't be ignored) that you should be aware of.

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.

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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.