Fawaz Abdulaziz Al Hokair & Company's (TADAWUL:4240) last week's 8.6% decline must have disappointed private companies who have a significant stake

Key Insights

• Significant control over Fawaz Abdulaziz Al Hokair by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 52% of the company
• Insider ownership in Fawaz Abdulaziz Al Hokair is 21%

If you want to know who really controls Fawaz Abdulaziz Al Hokair & Company (TADAWUL:4240), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 45% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ر.س2.1b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Fawaz Abdulaziz Al Hokair.

Check out our latest analysis for Fawaz Abdulaziz Al Hokair

What Does The Institutional Ownership Tell Us About Fawaz Abdulaziz Al Hokair?

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.

Less than 5% of Fawaz Abdulaziz Al Hokair is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Fawaz Abdulaziz Al Hokair. The company's largest shareholder is FAS Saudi Holding Company, with ownership of 45%. The second and third largest shareholders are Salman Abdulaziz Al-Hokair and Fawaz Abdulaziz Al-Hokair, with an equal amount of shares to their name at 7.0%.

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.

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 Fawaz Abdulaziz Al Hokair

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Fawaz Abdulaziz Al Hokair & Company. It has a market capitalization of just ر.س2.1b, and insiders have ر.س443m 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 31% stake in Fawaz Abdulaziz Al Hokair. 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 45%, of the Fawaz Abdulaziz Al Hokair 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Fawaz Abdulaziz Al Hokair (including 1 which doesn't sit too well with us) .

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.