Insiders with their considerable ownership were the key benefactors as Shatirah House Restaurant Co. (TADAWUL:9520) touches ر.س455m market cap

Key Insights

• Insiders appear to have a vested interest in Shatirah House Restaurant's growth, as seen by their sizeable ownership
• 59% of the company is held by a single shareholder (Mohammed Ali Al Ruwaigh)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Shatirah House Restaurant Co. (TADAWUL:9520) should be aware of the most powerful shareholder groups. With 70% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 13% gain.

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

Check out our latest analysis for Shatirah House Restaurant

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

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. 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.

We note that hedge funds don't have a meaningful investment in Shatirah House Restaurant. Mohammed Ali Al Ruwaigh is currently the largest shareholder, with 59% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 0.4% by the third-largest shareholder. Mohammed Hasan Al-Shuhail, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 own more than half of Shatirah House Restaurant Co.. This gives them effective control of the company. That means they own ر.س317m worth of shares in the ر.س455m company. That's quite meaningful. 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 30% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shatirah House Restaurant better, we need to consider many other factors. For instance, we've identified 2 warning signs for Shatirah House Restaurant that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.