What Type Of Shareholders Make Up The Saudi National Bank's (TADAWUL:1180) Share Registry?

By
Simply Wall St
Published
February 16, 2022
SASE:1180
Source: Shutterstock

A look at the shareholders of The Saudi National Bank (TADAWUL:1180) 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. Companies that have been privatized tend to have low insider ownership.

Saudi National Bank is a pretty big company. It has a market capitalization of ر.س314b. Normally institutions would own a significant portion of a company this size. Our analysis of the ownership of the company, below, shows 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 Saudi National Bank.

View our latest analysis for Saudi National Bank

ownership-breakdown
SASE:1180 Ownership Breakdown February 16th 2022

What Does The Institutional Ownership Tell Us About Saudi National Bank?

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.

As you can see, institutional investors have a fair amount of stake in Saudi National Bank. 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 Saudi National Bank's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SASE:1180 Earnings and Revenue Growth February 16th 2022

Hedge funds don't have many shares in Saudi National Bank. Looking at our data, we can see that the largest shareholder is The Public Investment Fund of The Kingdom of Saudi Arabia with 38% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 1.9% and 1.4%, of the shares outstanding, respectively.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Saudi National Bank

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

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 The Saudi National Bank in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ر.س134m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 57% of Saudi National Bank shares. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Saudi National Bank better, we need to consider many other factors. Take risks for example - Saudi National Bank has 2 warning signs we think you should be aware of.

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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