The price of Oil Refineries Ltd. (TLV:ORL) fell 5.3% last week; private companies would not be happy

Each investor in Oil Refineries Ltd. (TLV:ORL) needs to know the most powerful shareholder groups. We can see that private companies hold the lion’s share of the company with 32% ownership. In other words, the group faces the maximum upside potential (or downside risk).

And last week, private companies suffered the biggest losses, with the stock dropping 5.3%.

Let’s dive deeper into each type of oil refinery owner, starting with the table below.

However, if you prefer to see where opportunities and risks are within the ENT industryyou can check out our analysis on the oil and gas industry in Illinois.

TASE: ORL Ownership Breakdown October 3, 2022

What does institutional ownership tell us about oil refineries?

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.

As you can see, institutional investors own a sizeable share of oil refineries. 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 trajectory of past profits of oil refineries (below). Of course, keep in mind that there are other factors to consider as well.

TASE: ENT Earnings and Revenue Growth October 3, 2022

We note that hedge funds have no significant investment in oil refineries. Looking at our data we can see that the major shareholder is Alverstone Ltd with 32% of the shares outstanding. With 17% and 7.3% of the outstanding shares respectively, Hagag Group Real Estate Entrepreneurship Ltd and Israel Corporation Ltd are the second and third largest shareholders.

A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 56% stake.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.

Insider ownership of oil refineries

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.

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 own less than 1% of Oil Refineries Ltd. in their own name. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. 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 own about ₪804,000 of shares (at current prices). It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, who are usually individual investors, have a 26% stake in oil refineries. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Private Company Ownership

It seems that private companies hold 32% of the shares of oil refineries. 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.

Ownership of a public company

We can see that public companies own 24% of Oil Refineries shares outstanding. We cannot be sure, but it is quite possible that it is a strategic issue. Businesses can be similar or work together.

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. Take for example the ubiquitous specter of investment risk. We have identified 3 warning signs with oil refineries (at least 1 that cannot be ignored) and understanding them should be part of your investment process.

Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.

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.

Valuation is complex, but we help make it simple.

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

See the free analysis

Karen J. Nelson