Home Medical stocks Is Dr. Sulaiman Al Habib Medical Services Group Company’s (TADAWUL:4013) Shareholder Ownership...

Is Dr. Sulaiman Al Habib Medical Services Group Company’s (TADAWUL:4013) Shareholder Ownership Skewed Towards Insiders?

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The big shareholder groups in Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

With a market capitalization of ر.س39b, Dr. Sulaiman Al Habib Medical Services Group is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at our data on the ownership groups (below), it seems that institutions don’t own many shares in the company. We can zoom in on the different ownership groups, to learn more about Dr. Sulaiman Al Habib Medical Services Group.

See our latest analysis for Dr. Sulaiman Al Habib Medical Services Group

ownership-breakdown

SASE:4013 Ownership Breakdown January 14th 2021

What Does The Institutional Ownership Tell Us About Dr. Sulaiman Al Habib Medical Services Group?

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.

Institutions have a very small stake in Dr. Sulaiman Al Habib Medical Services Group. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth

SASE:4013 Earnings and Revenue Growth January 14th 2021

Hedge funds don’t have many shares in Dr. Sulaiman Al Habib Medical Services Group. The company’s largest shareholder is Suleiman bin Abdulaziz Suleiman Al Habib, with ownership of 40%. With 34% and 5.0% of the shares outstanding respectively, Mohammed Abdulaziz Al-Habib and Sons Holding Company and Jawharat Al Bahrm Investment Company are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 74% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Dr. Sulaiman Al Habib Medical Services Group

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.

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.

It seems insiders own a significant proportion of Dr. Sulaiman Al Habib Medical Services Group Company. It has a market capitalization of just ر.س39b, and insiders have ر.س17b worth of shares in their own names. That’s quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 14% ownership, the general public have some degree of sway over Dr. Sulaiman Al Habib Medical Services Group. 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 42%, of the Dr. Sulaiman Al Habib Medical Services Group 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 Dr. Sulaiman Al Habib Medical Services Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we’ve spotted 1 warning sign for Dr. Sulaiman Al Habib Medical Services Group you should know about.

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.

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