Unitronics (1989) (R"G) Ltd's (TLV:UNIT) 12% gain last week benefited both private equity firms who own 50% as well as insiders

Key Insights

• Unitronics (1989) (RG)'s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• 72% of the business is held by the top 2 shareholders
• Insider ownership in Unitronics (1989) (RG) is 22%

A look at the shareholders of Unitronics (1989) (R"G) Ltd (TLV:UNIT) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private equity firms were the group that benefitted the most from last week’s ₪43m market cap gain, insiders too had a 22% share in those profits.

Let's delve deeper into each type of owner of Unitronics (1989) (RG), beginning with the chart below.

See our latest analysis for Unitronics (1989) (RG)

What Does The Institutional Ownership Tell Us About Unitronics (1989) (RG)?

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.

Unitronics (1989) (RG) 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 Unitronics (1989) (RG)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Unitronics (1989) (RG). First Israel Mezzanine Investors Ltd. is currently the company's largest shareholder with 50% of shares outstanding. Haim Shani is the second largest shareholder owning 22% of common stock, and Arbitrage Family Office Ltd. holds about 4.3% of the company stock. Haim Shani, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Unitronics (1989) (RG)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 insiders own a significant proportion of Unitronics (1989) (R"G) Ltd. It has a market capitalization of just ₪405m, and insiders have ₪88m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

Private equity firms hold a 50% stake in Unitronics (1989) (RG). This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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. Be aware that Unitronics (1989) (RG) is showing 1 warning sign in our investment analysis , you should know about...

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.