Herfy Food Services Company's (TADAWUL:6002) market cap surged ر.س216m last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Herfy Food Services by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 64% ownership
• Insider ownership in Herfy Food Services is 15%

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A look at the shareholders of Herfy Food Services Company (TADAWUL:6002) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, public companies benefitted the most after the company's market cap rose by ر.س216m last week.

Let's delve deeper into each type of owner of Herfy Food Services, beginning with the chart below.

See our latest analysis for Herfy Food Services

What Does The Lack Of Institutional Ownership Tell Us About Herfy Food 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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Herfy Food 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 Herfy Food Services. Savola Group Company is currently the company's largest shareholder with 49% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 0.7% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Herfy Food Services

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.

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 information suggests that insiders maintain a significant holding in Herfy Food Services Company. It has a market capitalization of just ر.س1.4b, and insiders have ر.س216m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Herfy Food 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.

Public Company Ownership

We can see that public companies hold 49% of the Herfy Food Services shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Herfy Food Services better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.