Institutional investors control 34% of Max Stock Ltd. (TLV:MAXO) and were rewarded last week after stock increased 11%

Key Insights

• Institutions' substantial holdings in Max Stock implies that they have significant influence over the company's share price
• 58% of the business is held by the top 3 shareholders
• 18% of Max Stock is held by insiders

A look at the shareholders of Max Stock Ltd. (TLV:MAXO) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit ₪1.0b in market cap. One-year return to shareholders is currently 42% and last week’s gain was the icing on the cake.

Let's delve deeper into each type of owner of Max Stock, beginning with the chart below.

View our latest analysis for Max Stock

What Does The Institutional Ownership Tell Us About Max Stock?

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 Max Stock. 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. 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 Max Stock, (below). Of course, keep in mind that there are other factors to consider, too.

Max Stock is not owned by hedge funds. Moose Holdco Ltd is currently the largest shareholder, with 28% of shares outstanding. Ori Max is the second largest shareholder owning 18% of common stock, and Phoenix Excellence Pension and Provident Ltd. holds about 11% of the company stock. Ori Max, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Max Stock

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.

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 information suggests that insiders maintain a significant holding in Max Stock Ltd.. It has a market capitalization of just ₪1.0b, and insiders have ₪184m worth of shares in their own names. 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 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Max Stock. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 28%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Max Stock better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Max Stock you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.