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Retail investors among the largest shareholders in Abu Dhabi Islamic Bank PJSC (ADX:ADIB) saw their holdings rise in value after shares jumped 3.1% last week


key insights

Every investor in Abu Dhabi Islamic Bank PJSC (ADX: ADIB) should know the most powerful shareholder groups. Retail investors hold the largest stake in the company with a 46% stake. In other words, the group faces the greatest upside potential (or downside risk).

Clearly, retail investors benefited the most after the company’s market capitalization rose $1.2b last week.

Let’s take a closer look at what different types of shareholders can tell us about Abu Dhabi Islamic Bank PJSC.

Check out our latest analysis for Abu Dhabi Islamic Bank PJSC

ADX: ADIB Ownership Detail July 10, 2023

What does institutional ownership tell us about Abu Dhabi Islamic Bank PJSC?

Institutional investors often compare their own returns to those of a generally followed index. As such, they often consider buying larger companies included in the relevant benchmark index.

We can see that PJSC, Abu Dhabi Islamic Bank, does have institutional investors; they own a significant portion of the company’s shares. This can indicate that the company has some credibility in the investment community. However, it is best to be wary of relying on the so-called validation that institutional investors bring. They also make mistakes sometimes. There is always a risk of “crowded trades” when multiple institutions own a stock. When such deals go awry, multiple parties can race to sell shares quickly. This risk is higher for companies without a history of growth. Below you can see Abu Dhabi Islamic Bank PJSC’s historical earnings and revenues, but remember there’s always more to the story.

ADX: ADIB Earnings and Revenue Growth July 10, 2023

Hedge funds don’t have much of a stake in Abu Dhabi Islamic Bank PJSC. The company’s largest shareholder is Emirates International Investment Company LLC, with a 39% stake. Meanwhile, the second and third largest shareholders hold 7.7% and 1.8% of the outstanding shares, respectively. The third largest shareholder, Jawaan Awaidha Suhail Al Khaili, also happens to be chairman of the board.

What makes our research even more interesting is that we found that the top four shareholders control more than half of the company’s shares, implying that this group has considerable influence over the company’s decision-making.

Researching institutional ownership is a great way to measure and screen for expected performance of stocks. The same effect can be achieved by studying the analyst’s sentiment. There are plenty of analysts covering the stock, so it’s worth checking out their forecasts as well.

Internal Ownership of Abu Dhabi Islamic Bank PJSC

Different countries may have slightly different definitions of insiders, but board members always matter. Company management is responsible for running the business, but the CEO will be accountable to the board, even if he or she is a member of the board.

Most view insider ownership as a positive, as it can indicate that the board has a good relationship with other shareholders. However, in some cases too much power is concentrated in this group.

We can see that insiders own shares in Abu Dhabi Islamic Bank PJSC. Insiders own $693 million worth of stock (at current prices). Most would say this shows a good alignment of interests between shareholders and the board.Might be worth checking out though If those insiders have been selling.

General public ownership

The public (usually individual investors) owns 46% of Abu Dhabi Islamic Bank PJSC. This level of ownership, while substantial, may not be enough to change company policy if decisions are not in sync with other large shareholders.

private equity

Private equity firms hold a 39 percent stake in Abu Dhabi Islamic Bank PJSC. This suggests that they can influence key policy decisions. Sometimes we see private equity for longer periods of time, but generally they have shorter investment horizons and, as the name suggests, don’t invest much in public companies. After a while, they might consider selling and redeploying the capital elsewhere.

Next step:

While it’s well worth considering the different groups that own a company, there are other, more important factors.For example, we found 2 warning signs for Abu Dhabi Islamic Bank PJSC (1 involved!) You should know this before investing.

If you want to know what analysts are predicting for future growth, don’t miss free Analyst Forecast Report.

Note: Figures in this article are calculated using trailing 12-month data, ie 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 data for the full year.

Valuation is complicated, but we’re helping make it simple.

Find out if Abu Dhabi Islamic Bank PJSC is potentially overvalued or undervalued by viewing our comprehensive analysis, which includes Fair value estimates, risks and caveats, dividends, insider trading and financial health.

View free analysis

This Simply Wall St article is general in nature. We use an unbiased approach only to provide reviews based on historical data and analyst forecasts, and our articles are not intended to provide financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St does not hold a position in any of the aforementioned stocks.


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