With 10.0% one-year returns, institutional owners may ignore Energix - Renewable Energies Ltd.'s (TLV:ENRG) 3.9% stock price decline

Key Insights

• Given the large stake in the stock by institutions, Energix - Renewable Energies' stock price might be vulnerable to their trading decisions
• 50% of the company is held by a single shareholder (Alony-Hetz Properties & Investments Ltd)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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To get a sense of who is truly in control of Energix - Renewable Energies Ltd. (TLV:ENRG), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 78% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 3.9% last week. However, the 10.0% one-year returns may have helped alleviate their overall losses. But they would probably be wary of future losses.

In the chart below, we zoom in on the different ownership groups of Energix - Renewable Energies.

View our latest analysis for Energix - Renewable Energies

What Does The Institutional Ownership Tell Us About Energix - Renewable Energies?

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.

Energix - Renewable Energies already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Energix - Renewable Energies' historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Energix - Renewable Energies. Alony-Hetz Properties & Investments Ltd is currently the largest shareholder, with 50% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 9.4% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder. Additionally, the company's CEO Asa Levinger directly holds 0.7% of the total shares outstanding.

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 Energix - Renewable Energies

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 some shares in Energix - Renewable Energies Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₪132m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Energix - Renewable Energies. 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. Be aware that Energix - Renewable Energies is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

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.