Every investor in Israel Corporation Ltd (TLV:ILCO) should know the most powerful shareholder groups. With 46% of the capital, private companies hold the maximum shares in the company. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Institutions, meanwhile, represent 29% of the company’s shareholders. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time.
Let’s take a closer look at what different types of shareholders can tell us about Israel.
Check out our latest analysis for Israel
What does institutional ownership tell us about Israel?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Israel already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Israel’s historic earnings and earnings below, but keep in mind there’s always more to the story.
Israel does not belong to hedge funds. Looking at our data, we can see that the major shareholder is Millenium Investments Elad Ltd. with 44% of the shares outstanding. The second and third largest shareholders are Harel Pensions and Gemel Ltd. and Menora Mivtachim Pensions & Gemel Ltd., with an equal number of shares in their name at 5.8%.
After digging a little deeper, we found that the 2 major shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence company decisions.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.
Israel Insider Property
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Shareholders would likely be interested to learn that insiders hold shares in Israel Corporation Ltd. Insiders have a significant stake worth ₪493 million. Most would see this as a real positive. If you want to explore the issue of insider alignment, you can click here to see if insiders have been buying or selling.
General public property
With a 21% stake, the general public, made up mostly of individual investors, has a certain grip on Israel. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private Company Ownership
We can see that private companies hold 46% of the shares issued. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It is always useful to think about the different groups that own shares in a company. But to better understand Israel, we must consider many other factors. Take risks for example – Israel has 3 warning signs (and 1 that shouldn’t be ignored) that we think you should know about.
Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.