What Type Of Shareholders Make Up Saudi Pharmaceutical Industries and Medical Appliances Corporation's (TADAWUL:2070) Share Registry?

By
Simply Wall St
Published
September 12, 2021
SASE:2070
Source: Shutterstock

If you want to know who really controls Saudi Pharmaceutical Industries and Medical Appliances Corporation (TADAWUL:2070), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of ر.س6.0b, Saudi Pharmaceutical Industries and Medical Appliances is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Saudi Pharmaceutical Industries and Medical Appliances.

See our latest analysis for Saudi Pharmaceutical Industries and Medical Appliances

ownership-breakdown
SASE:2070 Ownership Breakdown September 13th 2021

What Does The Institutional Ownership Tell Us About Saudi Pharmaceutical Industries and Medical Appliances?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Saudi Pharmaceutical Industries and Medical Appliances already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Saudi Pharmaceutical Industries and Medical Appliances' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SASE:2070 Earnings and Revenue Growth September 13th 2021

Hedge funds don't have many shares in Saudi Pharmaceutical Industries and Medical Appliances. The company's largest shareholder is Arab Company for Drug Industries & Medical Supplies, with ownership of 20%. Amin Mohammed Shakir is the second largest shareholder owning 13% of common stock, and General Organization for Social Insurance holds about 8.2% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Saudi Pharmaceutical Industries and Medical Appliances

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 insiders own a significant proportion of Saudi Pharmaceutical Industries and Medical Appliances Corporation. Insiders own ر.س798m worth of shares in the ر.س6.0b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 47% stake in the company, will not 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.

Private Company Ownership

We can see that Private Companies own 20%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Saudi Pharmaceutical Industries and Medical Appliances has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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