Do Insiders Own Lots Of Shares In Al Abdullatif Industrial Investment Company (TADAWUL:2340)?

By
Simply Wall St
Published
October 11, 2021
SASE:2340
Source: Shutterstock

Every investor in Al Abdullatif Industrial Investment Company (TADAWUL:2340) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Al Abdullatif Industrial Investment is not a large company by global standards. It has a market capitalization of ر.س2.6b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Al Abdullatif Industrial Investment.

View our latest analysis for Al Abdullatif Industrial Investment

ownership-breakdown
SASE:2340 Ownership Breakdown October 12th 2021

What Does The Lack Of Institutional Ownership Tell Us About Al Abdullatif Industrial Investment?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Al Abdullatif Industrial Investment might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth
SASE:2340 Earnings and Revenue Growth October 12th 2021

Al Abdullatif Industrial Investment is not owned by hedge funds. Al-Abdullatif Group Holding Company is currently the company's largest shareholder with 60% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Omar Al Abdullatif is the second largest shareholder owning 5.7% of common stock, and Suleiman Omar Al Abdullatif holds about 2.5% of the company stock. Suleiman Omar Al Abdullatif, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Al Abdullatif Industrial Investment

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Al Abdullatif Industrial Investment Company. In their own names, insiders own ر.س215m worth of stock in the ر.س2.6b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 31% stake in Al Abdullatif Industrial Investment. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 60%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Al Abdullatif Industrial Investment better, we need to consider many other factors. For instance, we've identified 1 warning sign for Al Abdullatif Industrial Investment that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.