Shapir Engineering and Industry Ltd's (TLV:SPEN) most bullish insider, Senior Key Executive Gil Shapira must be pleased with the recent 5.4% gain

Key Insights

• Insiders appear to have a vested interest in Shapir Engineering and Industry's growth, as seen by their sizeable ownership
• 60% of the business is held by the top 4 shareholders
• Institutions own 21% of Shapir Engineering and Industry

A look at the shareholders of Shapir Engineering and Industry Ltd (TLV:SPEN) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 5.4% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shapir Engineering and Industry.

See our latest analysis for Shapir Engineering and Industry

What Does The Institutional Ownership Tell Us About Shapir Engineering and Industry?

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

As you can see, institutional investors have a fair amount of stake in Shapir Engineering and Industry. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shapir Engineering and Industry, (below). Of course, keep in mind that there are other factors to consider, too.

Shapir Engineering and Industry is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Shapir Engineering and Industry's case, its Senior Key Executive, Gil Shapira, is the largest shareholder, holding 15% of shares outstanding. The second and third largest shareholders are Harel Shapira and Israel Shapira, with an equal amount of shares to their name at 15%. Note that two of the top three shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 4 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shapir Engineering and Industry

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Shapir Engineering and Industry Ltd. This gives them effective control of the company. That means insiders have a very meaningful ₪4.4b stake in this ₪7.3b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Shapir Engineering and Industry. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shapir Engineering and Industry better, we need to consider many other factors. For example, we've discovered 3 warning signs for Shapir Engineering and Industry (1 doesn't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.