Riyadh Cement Company's (TADAWUL:9512) market cap dropped ر.س198m last week; Retail investors bore the brunt

Key Insights

• Riyadh Cement's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 18 shareholders own 45% of the company
• 21% of Riyadh Cement is held by insiders

A look at the shareholders of Riyadh Cement Company (TADAWUL:9512) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, retail investors endured the biggest losses as the stock fell by 5.1%.

Let's delve deeper into each type of owner of Riyadh Cement, beginning with the chart below.

Check out our latest analysis for Riyadh Cement

What Does The Lack Of Institutional Ownership Tell Us About Riyadh Cement?

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. Riyadh Cement'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.

Riyadh Cement is not owned by hedge funds. Our data shows that Rashed & Partners Development Co Ltd is the largest shareholder with 23% of shares outstanding. Sultan Salman Al Saud is the second largest shareholder owning 8.1% of common stock, and Mohammed Al-Saud holds about 6.1% of the company stock. Furthermore, CEO Shoeil Al Ayed is the owner of 0.9% of the company's shares.

A deeper look at our ownership data shows that the top 18 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of Riyadh Cement

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 maintain a significant holding in Riyadh Cement Company. It has a market capitalization of just ر.س3.8b, and insiders have ر.س797m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 55% stake in Riyadh Cement, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 23%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Riyadh Cement better, we need to consider many other factors. Take risks for example - Riyadh Cement has 1 warning sign we think you should be aware of.

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.