Saudi Marketing Company (TADAWUL:4006) adds ر.س109m in market cap and insiders have a 66% stake in that gain

To get a sense of who is truly in control of Saudi Marketing Company (TADAWUL:4006), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ر.س109m last week.

In the chart below, we zoom in on the different ownership groups of Saudi Marketing.

View our latest analysis for Saudi Marketing

What Does The Lack Of Institutional Ownership Tell Us About Saudi Marketing?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Saudi Marketing, for yourself, below.

We note that hedge funds don't have a meaningful investment in Saudi Marketing. Hazem Bin Fayez Khalid Al Aswad is currently the largest shareholder, with 57% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 3.0% and 2.9% of the shares outstanding respectively, Mohammad Aswad and Tareq Aswad are the second and third largest shareholders. Two of the top three shareholders happen to be Senior Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders. Furthermore, CEO Maher Al Aswad is the owner of 2.9% of the company's shares.

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 Saudi Marketing

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.

It seems that insiders own more than half the Saudi Marketing Company stock. This gives them a lot of power. So they have a ر.س695m stake in this ر.س1.0b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. 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 Saudi Marketing is showing 1 warning sign in our investment analysis , you should know about...

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. 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.