Stock Analysis

Are Institutions Heavily Invested In Bezeq The Israel Telecommunication Corp. Ltd's (TLV:BEZQ) Shares?

TASE:BEZQ
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The big shareholder groups in Bezeq The Israel Telecommunication Corp. Ltd (TLV:BEZQ) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

Bezeq The Israel Telecommunication is a pretty big company. It has a market capitalization of ₪10b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems 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 Bezeq The Israel Telecommunication.

Check out our latest analysis for Bezeq The Israel Telecommunication

ownership-breakdown
TASE:BEZQ Ownership Breakdown September 7th 2021

What Does The Institutional Ownership Tell Us About Bezeq The Israel Telecommunication?

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.

Bezeq The Israel Telecommunication 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 Bezeq The Israel Telecommunication's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TASE:BEZQ Earnings and Revenue Growth September 7th 2021

Bezeq The Israel Telecommunication is not owned by hedge funds. B Communications Ltd is currently the largest shareholder, with 27% of shares outstanding. Norges Bank Investment Management is the second largest shareholder owning 3.1% of common stock, and The Vanguard Group, Inc. holds about 2.3% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Bezeq The Israel Telecommunication

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our data suggests that insiders own under 1% of Bezeq The Israel Telecommunication Corp. Ltd in their own names. Keep in mind that it's a big company, and the insiders own ₪841k 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

The general public holds a substantial 58% stake in Bezeq The Israel Telecommunication, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

Public companies currently own 27% of Bezeq The Israel Telecommunication stock. 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:

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 Bezeq The Israel Telecommunication you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.
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