Nasdaq
华尔街日报While institutions invested in Retailors Ltd (TLV:RTLS) benefited from last week's 8.3% gain, public companies stood to gain the most
Key Insights
- Retailors' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- 58% of the company is held by a single shareholder (Fox-Wizel Ltd.)
- 30% of Retailors is held by Institutions
To get a sense of who is truly in control of Retailors Ltd (TLV:RTLS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While public companies were the group that benefitted the most from last week’s ₪202m market cap gain, institutions too had a 30% share in those profits.
Let's delve deeper into each type of owner of Retailors, beginning with the chart below.
Check out our latest analysis for Retailors
What Does The Institutional Ownership Tell Us About Retailors?
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.
Retailors already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Retailors' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Retailors. Looking at our data, we can see that the largest shareholder is Fox-Wizel Ltd. with 58% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 6.7% by the third-largest shareholder.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Retailors
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in Retailors Ltd. As individuals, the insiders collectively own ₪53m worth of the ₪2.6b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 10% stake in the company, and hence can't 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.
Public Company Ownership
It appears to us that public companies own 58% of Retailors. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Retailors is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
Of course this may not be the best stock to buy. So take a peek at this free 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.
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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.