Are institutions investing heavily in shares of Saudi Arabia’s mobile telecommunications company (TADAWUL:7030)?

Every investor in Mobile Telecommunications Company Saudi Arabia (TADAWUL:7030) should know the most powerful shareholder groups. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.

Mobile Telecommunications Company Saudi Arabia has a market cap of ر.س11b, so we expect some institutional investors to have taken notice of the stock. Our analysis of company ownership, below, shows that the institutions are visible on the share register. We can zoom in on the different ownership groups, to know more about Mobile Telecommunications Company Saudi Arabia.

Check out our latest analysis for Mobile Telecommunications Company Saudi Arabia

SASE: 7030 Breakdown of ownership August 15, 2022

What does institutional ownership tell us about the mobile telecommunications company in Saudi Arabia?

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.

Mobile Telecommunications Company Saudi Arabia already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Mobile Telecommunications Company Saudi Arabia (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
SASE: 7030 Earnings and Revenue Growth August 15, 2022

We note that hedge funds have no significant investment in Mobile Telecommunications Company Saudi Arabia. United International Telecommunication Investment & Projects is currently the largest shareholder, with 37% of the outstanding shares. Meanwhile, the second and third largest shareholders hold 2.9% and 2.4% of the outstanding shares respectively.

Looking at our ownership data, we found that 25 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Insider ownership of a mobile telecommunications company in Saudi Arabia

The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data suggests that insiders hold less than 1% of Mobile Telecommunications Company Saudi Arabia in their own name. But they may have an indirect interest through a corporate structure that we have not noted. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case, insiders own 1.5 million shares. It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.

General public property

The general public, consisting mainly of individual investors, collectively owns 54% of the shares of Mobile Telecommunications Company Saudi Arabia. This size of ownership gives mainstream investors a certain collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed corporate acquisitions.

Private Company Ownership

Private companies appear to own 40% of the shares of Saudi Arabia’s mobile telecommunications company. 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.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Be aware that Mobile Telecommunications Company Saudi Arabia displays 1 warning sign in our investment analysis you should know…

At the end of the day the future is the most important. You can access this free analyst forecast report for the company.

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 the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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.

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Sean B. Jackson