Institutions along with public companies who hold considerable shares inMatrix IT Ltd. (TLV:MTRX) come under pressure; lose 3.7% of holdings value

Key Insights

• The considerable ownership by public companies in Matrix IT indicates that they collectively have a greater say in management and business strategy
• 55% of the business is held by the top 2 shareholders
• 32% of Matrix IT is held by Institutions

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If you want to know who really controls Matrix IT Ltd. (TLV:MTRX), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 32% shares weren’t spared from last week’s ₪203m market cap drop, public companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Matrix IT.

Check out our latest analysis for Matrix IT

What Does The Institutional Ownership Tell Us About Matrix IT?

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 Matrix IT 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Matrix IT's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Matrix IT. The company's largest shareholder is Formula Systems (1985) Ltd., with ownership of 48%. Meanwhile, the second and third largest shareholders, hold 7.0% and 4.7%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Matrix IT

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that Matrix IT Ltd. insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₪19m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Matrix IT. 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.

Public Company Ownership

We can see that public companies hold 48% of the Matrix IT shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Matrix IT 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.