Do Insiders Own Lots Of Shares In Baladna Q.P.S.C. (DSM:BLDN)?

By
Simply Wall St
Published
March 20, 2021
DSM:BLDN
Source: Shutterstock

A look at the shareholders of Baladna Q.P.S.C. (DSM:BLDN) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of ر.ق3.2b, Baladna Q.P.S.C is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Baladna Q.P.S.C.

View our latest analysis for Baladna Q.P.S.C

ownership-breakdown
DSM:BLDN Ownership Breakdown March 21st 2021

What Does The Institutional Ownership Tell Us About Baladna Q.P.S.C?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Baladna Q.P.S.C 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. 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 Baladna Q.P.S.C's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
DSM:BLDN Earnings and Revenue Growth March 21st 2021

We note that hedge funds don't have a meaningful investment in Baladna Q.P.S.C. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Baladna Q.P.S.C's case, its Senior Key Executive, Ramez Al-Khayyat, is the largest shareholder, holding 12% of shares outstanding. The second and third largest shareholders are Mohamad Moutaz Mhd Al-Khayyat and General Retirement and Social Insurance Authority, with an equal amount of shares to their name at 12%.

Our studies suggest that the top 13 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Baladna Q.P.S.C

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 insiders maintain a significant holding in Baladna Q.P.S.C.. It has a market capitalization of just ر.ق3.2b, and insiders have ر.ق792m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 57% stake in Baladna Q.P.S.C, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With a stake of 5.0%, private equity firms could influence the Baladna Q.P.S.C board. 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 Baladna Q.P.S.C is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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. 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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