Recent 5.6% pullback would hurt Summit Real Estate Holdings Ltd (TLV:SMT) insiders

Key Insights

• Summit Real Estate Holdings' significant insider ownership suggests inherent interests in company's expansion
• 51% of the company is held by a single shareholder (Zohar Levy)
• Institutional ownership in Summit Real Estate Holdings is 37%

A look at the shareholders of Summit Real Estate Holdings Ltd (TLV:SMT) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.6% decline in share price, insiders suffered the most losses.

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

See 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.

We can see that Summit Real Estate Holdings 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Summit Real Estate Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Summit Real Estate Holdings is not owned by hedge funds. Zohar Levy is currently the largest shareholder, with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 11% and 6.9%, of the shares outstanding, respectively.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Summit Real Estate Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of Summit Real Estate Holdings Ltd. This means they can collectively make decisions for the company. Insiders own ₪2.0b worth of shares in the ₪3.9b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Summit Real Estate Holdings has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.

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.