Key Insights

• The considerable ownership by sovereign wealth funds in Saudi Tadawul Group Holding indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Public Investment Fund with a 60% stake
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Saudi Tadawul Group Holding Company (TADAWUL:1111), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are sovereign wealth funds with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, sovereign wealth funds collectively scored the highest last week as the company hit ر.س21b market cap following a 6.5% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Saudi Tadawul Group Holding.

What Does The Institutional Ownership Tell Us About Saudi Tadawul Group Holding?

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.

We can see that Saudi Tadawul Group Holding does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Saudi Tadawul Group Holding, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Saudi Tadawul Group Holding. Our data shows that Public Investment Fund is the largest shareholder with 60% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 1.7% of the shares outstanding, followed by an ownership of 1.2% 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Saudi Tadawul Group Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Saudi Tadawul Group Holding Company in their own names. Keep in mind that it's a big company, and the insiders own ر.س1.1m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Saudi Tadawul Group Holding. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Saudi Tadawul Group Holding better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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.