Private companies invested in Group Five Pipe Saudi Company (TADAWUL:9523) copped the brunt of last week's ر.س158m market cap decline

Key Insights

• The considerable ownership by private companies in Group Five Pipe Saudi indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 2 shareholders
• Insider ownership in Group Five Pipe Saudi is 32%

Every investor in Group Five Pipe Saudi Company (TADAWUL:9523) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by ر.س158m.

Let's delve deeper into each type of owner of Group Five Pipe Saudi, beginning with the chart below.

See our latest analysis for Group Five Pipe Saudi

What Does The Lack Of Institutional Ownership Tell Us About Group Five Pipe Saudi?

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 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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Group Five Pipe Saudi, for yourself, below.

We note that hedge funds don't have a meaningful investment in Group Five Pipe Saudi. Al-Qahtani Pipe Coating Industries is currently the company's largest shareholder with 36% of shares outstanding. Tariq Abdulhadi Al-Qahtani is the second largest shareholder owning 14% of common stock, and Abdullah Abdulhadi Al-Qahtani holds about 11% of the company stock. Abdullah Abdulhadi Al-Qahtani, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Group Five Pipe Saudi

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 maintain a significant holding in Group Five Pipe Saudi Company. Insiders have a ر.س377m stake in this ر.س1.2b business. 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 33% stake in Group Five Pipe Saudi. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 36%, of the Group Five Pipe Saudi stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Group Five Pipe Saudi better, we need to consider many other factors. Take risks for example - Group Five Pipe Saudi has 4 warning signs (and 3 which are potentially serious) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.