What does the ownership structure of Aamal Company QPSC (DSM:AHCS) look like?

The large shareholder groups of Aamal Company QPSC (DSM:AHCS) hold power over the company. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.

Aamal Company QPSC has a market cap of ر.ق6.0b, so we expect some institutional investors to have noticed the stock. In the graph below, we can see that the institutions are not really present on the share register. Let’s take a closer look at what different types of shareholders can tell us about Aamal Company QPSC

Check out our latest analysis for Aamal Company QPSC

DSM: Distribution of ownership of the AHCS on June 26, 2022

What does the lack of institutional ownership tell us about Aamal Company QPSC?

Small companies that are not very actively traded often lack institutional investors, but it is less common to see large companies without them.

There are many reasons why a company may not have institutions listed in the share register. It can be difficult for institutions to buy large amounts of shares if liquidity (the amount of shares traded each day) is low. If the company did not need to raise capital, institutions might not have the opportunity to build a position. It’s also possible that the fund managers don’t own the stock because they aren’t convinced it will perform well. Aamal Company QPSC’s earnings and revenue track record (below) may not be compelling to institutional investors – or they may simply not have examined the company closely.

earnings-and-revenue-growth
DSM:AHCS Earnings and Revenue Growth June 26, 2022

Hedge funds don’t have a lot of shares in Aamal Company QPSC The company’s largest shareholder is Al Faisal Holding Company LLC, with a 46% stake. Faisal Bin Qassim Faisal Al Thani is the second largest shareholder with 25% of the common shares, and City Limousine Company WLL owns around 1.0% of the company’s shares.

To make our study more interesting, we found that the top 2 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.

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. There is some analyst coverage of the stock, but it could still become better known over time.

Insider ownership of Aamal QPSC

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

It appears that insiders hold a large share of Aamal Company QPSC. Insiders hold ر.ق.1.6 billion worth of shares in the ر.ق.6.0 billion company. It is quite significant. Good to see this level of investment. You can check here if these insiders have bought recently.

General public property

With a 26% stake, the general public, consisting mainly of individual investors, has some influence over Aamal Company QPSC 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

We can see that private companies hold 47% of the shares issued. 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. Take for example the ubiquitous specter of investment risk. We have identified 2 warning signs with Aamal Company QPSC (at least 1 which cannot be ignored), and understanding them should be part of your investment process.

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.

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