What Kind Of Shareholders Hold The Majority In Lahav LR Real Estate Ltd's (TLV:LAHAV) Shares?

By
Simply Wall St
Published
January 25, 2022
TASE:LAHAV
Source: Shutterstock

The big shareholder groups in Lahav LR Real Estate Ltd (TLV:LAHAV) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Lahav LR Real Estate is a smaller company with a market capitalization of ₪1.2b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Lahav LR Real Estate.

Check out our latest analysis for Lahav LR Real Estate

ownership-breakdown
TASE:LAHAV Ownership Breakdown January 25th 2022

What Does The Institutional Ownership Tell Us About Lahav LR Real Estate?

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 Lahav LR Real Estate. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Lahav LR Real Estate's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TASE:LAHAV Earnings and Revenue Growth January 25th 2022

Hedge funds don't have many shares in Lahav LR Real Estate. Our data shows that Avraham Levy is the largest shareholder with 43% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.0%, of the shares outstanding, respectively. Naftali Shimshon, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. 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 Lahav LR Real Estate

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Lahav LR Real Estate Ltd stock. This gives them a lot of power. That means they own ₪704m worth of shares in the ₪1.2b company. That's quite meaningful. 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 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lahav LR Real Estate. 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.

Private Company Ownership

It seems that Private Companies own 13%, of the Lahav LR Real Estate stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For instance, we've identified 4 warning signs for Lahav LR Real Estate (1 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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