Institutions profited after Retailors Ltd's (TLV:RTLS) market cap rose ₪241m last week but public companies profited the most

Key Insights

• The considerable ownership by public companies in Retailors indicates that they collectively have a greater say in management and business strategy
• 59% of the company is held by a single shareholder (Fox-Wizel Ltd.)
• Institutions own 23% of Retailors

Every investor in Retailors Ltd (TLV:RTLS) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that benefitted the most from last week’s ₪241m market cap gain, institutions too had a 23% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Retailors.

See our latest analysis for Retailors

What Does The Institutional Ownership Tell Us About Retailors?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Retailors already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Retailors' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Retailors. Looking at our data, we can see that the largest shareholder is Fox-Wizel Ltd. with 59% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 10% and 5.6%, of the shares outstanding, respectively.

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 Retailors

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. 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.

Shareholders would probably be interested to learn that insiders own shares in Retailors Ltd. As individuals, the insiders collectively own ₪62m worth of the ₪3.6b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Retailors. 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.

Public Company Ownership

We can see that public companies hold 59% of the Retailors shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Retailors better, we need to consider many other factors. Take risks for example - Retailors has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.