Insiders were the biggest winners as El Al Israel Airlines Ltd.'s (TLV:ELAL) market cap grew by ₪331m last week

Key Insights

• Significant insider control over El Al Israel Airlines implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 51% ownership
• 15% of El Al Israel Airlines is held by Institutions

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To get a sense of who is truly in control of El Al Israel Airlines Ltd. (TLV:ELAL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 46% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 4.5% gain.

In the chart below, we zoom in on the different ownership groups of El Al Israel Airlines.

Check out our latest analysis for El Al Israel Airlines

What Does The Institutional Ownership Tell Us About El Al Israel Airlines?

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 El Al Israel Airlines does have institutional investors; and they hold a good portion of the company's 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. 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 El Al Israel Airlines' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in El Al Israel Airlines. Our data shows that Eli Rozenberg is the largest shareholder with 45% of shares outstanding. With 3.8% and 2.0% of the shares outstanding respectively, Harel Insurance Investments & Financial Services Ltd and The Vanguard Group, Inc. are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. 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 El Al Israel Airlines

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.

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 most recent data indicates that insiders own a reasonable proportion of El Al Israel Airlines Ltd.. Insiders own ₪3.5b worth of shares in the ₪7.6b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over El Al Israel Airlines. 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.

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. To that end, you should be aware of the 1 warning sign we've spotted with El Al Israel Airlines .

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.