Could the ownership structure of Saudi Arabia’s mobile telecommunications company (TADAWUL:7030) tell us anything useful?

A look at the shareholders of Mobile Telecommunications Company Saudi Arabia (TADAWUL:7030) can tell us which group is the most powerful. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. Companies that have been privatized tend to have low insider ownership.

Mobile Telecommunications Company Saudi Arabia has a market cap of ر.س13b, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. Our analysis of company ownership, below, shows that the institutions are visible on the share register. Let’s dig deeper into each owner type to learn more about Mobile Telecommunications Company Saudi Arabia.

See our latest review for Mobile Telecommunications Company Saudi Arabia

SASE: 7030 Distribution of ownership May 3, 2022

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

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors own a sizeable share of Mobile Telecommunications Company Saudi Arabia. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. 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 Mobile Telecommunications Company Saudi Arabia’s historical revenue and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
SASE: 7030 Earnings and Revenue Growth May 3, 2022

Hedge funds do not have many shares in Mobile Telecommunications Company Saudi Arabia. United International Telecommunication Investment & Projects is currently the company’s largest shareholder with 37% of the shares outstanding. For context, the second shareholder owns approximately 2.9% of the outstanding shares, followed by a 1.9% stake by the third shareholder.

A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small shareholders where no single shareholder has a majority.

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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

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 fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much of a proportional interest. In this case, they hold around £3.7 million worth of shares (at current prices). Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.

General public property

The general public – including retail investors – owns 55% 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. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we found 1 warning sign for Mobile Telecommunications Company Saudi Arabia which you should be aware of before investing here.

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

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.

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.

Sean B. Jackson