Institutional investors have a lot riding on Retal Urban Development Company (TADAWUL:4322) with 56% ownership

Key Insights

• Significantly high institutional ownership implies Retal Urban Development's stock price is sensitive to their trading actions
• The largest shareholder of the company is Al Fozan Holding Company with a 53% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Retal Urban Development Company (TADAWUL:4322) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 3.5% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The one-year return on investment is currently 96% and last week's gain would have been more than welcomed.

In the chart below, we zoom in on the different ownership groups of Retal Urban Development.

See our latest analysis for Retal Urban Development

What Does The Institutional Ownership Tell Us About Retal Urban Development?

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.

Retal Urban Development 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Retal Urban Development's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Retal Urban Development is not owned by hedge funds. Our data shows that Al Fozan Holding Company is the largest shareholder with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. Maali Holding Company is the second largest shareholder owning 8.3% of common stock, and Maali Al Khaleej Trading Company holds about 5.0% of the company stock. In addition, we found that Abdullah bin Faisal Abdulaziz Al-Braikan, the CEO has 3.6% of the shares allocated to their name.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Retal Urban Development

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. 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.

We can report that insiders do own shares in Retal Urban Development Company. This is a big company, so it is good to see this level of alignment. Insiders own ر.س309m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Retal Urban Development. 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.

Private Company Ownership

It seems that Private Companies own 14%, of the Retal Urban Development 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 Retal Urban Development better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Retal Urban Development (including 1 which is potentially serious) .

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.