Yanbu National Petrochemical Company's (TADAWUL:2290) market cap dropped ر.س1.5b last week; Public companies bore the brunt

Key Insights

• Significant control over Yanbu National Petrochemical by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Saudi Arabian Oil Company with a 51% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

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A look at the shareholders of Yanbu National Petrochemical Company (TADAWUL:2290) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to ر.س18b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Yanbu National Petrochemical.

Check out our latest analysis for Yanbu National Petrochemical

What Does The Institutional Ownership Tell Us About Yanbu National Petrochemical?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Yanbu National Petrochemical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Yanbu National Petrochemical, (below). Of course, keep in mind that there are other factors to consider, too.

Yanbu National Petrochemical is not owned by hedge funds. Our data shows that Saudi Arabian Oil Company is the largest shareholder with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 2.1% and 1.3%, of the shares outstanding, respectively.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Yanbu National Petrochemical

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.

Our most recent data indicates that insiders own less than 1% of Yanbu National Petrochemical Company. Keep in mind that it's a big company, and the insiders own ر.س756k worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yanbu National Petrochemical. 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.

Public Company Ownership

We can see that public companies hold 51% of the Yanbu National Petrochemical 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 Yanbu National Petrochemical better, we need to consider many other factors. Be aware that Yanbu National Petrochemical is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

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.