Insiders the biggest winners as Watani Iron Steel Co.'s (TADAWUL:9513) market cap rises to ر.س581m

Key Insights

• Watani Iron Steel's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 53% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Watani Iron Steel Co. (TADAWUL:9513) can tell us which group is most powerful. With 54% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by ر.س64m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Watani Iron Steel.

See our latest analysis for Watani Iron Steel

What Does The Lack Of Institutional Ownership Tell Us About Watani Iron Steel?

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

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. Watani Iron Steel might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Watani Iron Steel is not owned by hedge funds. The company's largest shareholder is Abdulkarim Bin Mohammad Abdulaziz Al-Rajhi, with ownership of 35%. Meanwhile, the second and third largest shareholders, hold 18% and 0.9%, of the shares outstanding, respectively. Two of the top three shareholders happen to be Chief Executive Officer and Vice Chairman, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Watani Iron Steel

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Watani Iron Steel Co. stock. This gives them a lot of power. Given it has a market cap of ر.س581m, that means they have ر.س312m 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

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Watani Iron Steel. 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. For example, we've discovered 1 warning sign for Watani Iron Steel that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.