Insiders the biggest winners as Al-Dawaa Medical Services Company's (TADAWUL:4163) market cap rises to ر.س6.8b

To get a sense of who is truly in control of Al-Dawaa Medical Services Company (TADAWUL:4163), 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 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by ر.س204m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Al-Dawaa Medical Services.

See our latest analysis for Al-Dawaa Medical Services

What Does The Lack Of Institutional Ownership Tell Us About Al-Dawaa Medical Services?

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. Al-Dawaa Medical Services' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Al-Dawaa Medical Services. The Mawarid Group of Companies is currently the company's largest shareholder with 32% of shares outstanding. H. B.M. bin Fahad bin Abdulaziz Al Saud is the second largest shareholder owning 14% of common stock, and Mohammed Saad Al-Farraj Al-Subaie holds about 8.0% of the company stock. Mohammed Saad Al-Farraj Al-Subaie, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Al-Dawaa Medical Services

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.

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 a reasonable proportion of Al-Dawaa Medical Services Company. Insiders own ر.س2.4b worth of shares in the ر.س6.8b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Al-Dawaa Medical Services. 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.

Private Company Ownership

It seems that Private Companies own 32%, of the Al-Dawaa Medical Services stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Al-Dawaa Medical Services better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Al-Dawaa Medical Services (including 1 which can't be ignored) .

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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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.