Al Dhafra Insurance Company PSC (ADX:DHAFRA) share price fell 10.0% last week; individual investors would not be happy

Every investor in Al Dhafra Insurance Company PSC (ADX:DHAFRA) should know the most powerful shareholder groups. And the group that holds the biggest slice of the pie are individual investors with 47% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

And last week, individual investors suffered the biggest losses as the stock fell 10.0%.

In the table below we zoom in on the different ownership groups of Al Dhafra Insurance Company PSC

Our analysis indicates that DHAFRA is potentially overrated!

ADX: DHAFRA Property Breakdown November 19, 2022

What does the absence of institutional ownership tell us about Al Dhafra Insurance Company PSC?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. But it’s unusual to see large companies without institutional investors.

There can be various reasons why no institution owns shares in a company. Typically, newly listed small companies do not attract much attention from fund managers, as it would not be possible for large fund managers to gain a significant position in the company. Alternatively, there could be something about the company that has kept institutional investors away. Al Dhafra Insurance Company PSC may not have the kind of past performance institutions are looking for, or maybe they just haven’t researched the business closely.

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ADX: DHAFRA Earnings and Revenue Growth November 19, 2022

We note that hedge funds have no significant investment in Al Dhafra Insurance Company PSC Looking at our data, we can see that the largest shareholder is Ghobash Trading and Investment Company with 22% of shares outstanding. Meanwhile, the second and third largest shareholders hold 13% and 6.6% of the outstanding shares respectively.

Our research also shed light on the fact that approximately 53% of the company is controlled by the top 5 shareholders, suggesting that these owners wield significant influence over the company.

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. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.

Owned by an insider of Al Dhafra Insurance Company PSC

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

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 most recent data indicates that insiders own a reasonable proportion of Al Dhafra Insurance Company PSC. Insiders have a د.إ104 million stake in this د.إ540 million venture. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

With a 47% stake, the general public, consisting mainly of individual investors, has some influence over Al Dhafra Insurance Company PSC Although this group cannot necessarily make the decisions, it can certainly have a real influence on how whose company is Course.

Private Company Ownership

It seems that private companies hold 34% of the shares of the insurance company Al Dhafra PSC. Private companies can be related parties. Sometimes insiders have an interest in a public company through an equity 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. Take for example the ubiquitous specter of investment risk. We have identified 3 warning signs with Al Dhafra Insurance Company PSC (at least 2 that are significant), and understanding them should be part of your investment process.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

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.

Valuation is complex, but we help make it simple.

Find out if Al Dhafra Insurance Company PSC is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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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.

Karen J. Nelson