The recent pullback must have dismayed Summit Real Estate Holdings Ltd (TLV:SMT) insiders who own 52% of the company

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)
• Institutions own 34% of Summit Real Estate Holdings

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Every investor in Summit Real Estate Holdings Ltd (TLV:SMT) should be aware of the most powerful shareholder groups. With 52% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by ₪214m.

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?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Summit Real Estate Holdings. 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.

Hedge funds don't have many shares in Summit Real Estate Holdings. Looking at our data, we can see that the largest shareholder is Zohar Levy with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 11% and 4.7%, 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. 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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems that insiders own more than half the Summit Real Estate Holdings Ltd stock. This gives them a lot of power. That means insiders have a very meaningful ₪2.4b stake in this ₪4.6b business. 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, who are usually individual investors, hold a 14% stake in Summit Real Estate Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Summit Real Estate Holdings is showing 3 warning signs in our investment analysis , and 2 of those make us uncomfortable...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.