Insiders with their considerable ownership were the key benefactors as Shatirah House Restaurant Co. (TADAWUL:6016) touches ر.س571m market cap

Key Insights

• Shatirah House Restaurant's significant insider ownership suggests inherent interests in company's expansion
• 56% of the company is held by a single shareholder (Mohammed Ali Al Ruwaigh)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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To get a sense of who is truly in control of Shatirah House Restaurant Co. (TADAWUL:6016), it is important to understand the ownership structure of the business. With 65% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit ر.س571m market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shatirah House Restaurant.

View our latest analysis for Shatirah House Restaurant

What Does The Lack Of Institutional Ownership Tell Us About Shatirah House Restaurant?

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Shatirah House Restaurant's 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 Shatirah House Restaurant. The company's largest shareholder is Mohammed Ali Al Ruwaigh, with ownership of 56%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 9.0% and 0.1% of the shares outstanding respectively, Sami Mohammed Al Obaid and Mohammed Hasan Al-Shuhail are the second and third largest shareholders. Mohammed Hasan Al-Shuhail, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shatirah House Restaurant

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders own more than half of Shatirah House Restaurant Co.. This gives them effective control of the company. Given it has a market cap of ر.س571m, that means they have ر.س370m worth of shares. 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, who are usually individual investors, hold a 35% stake in Shatirah House Restaurant. 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.

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. Take risks for example - Shatirah House Restaurant has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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.

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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.