With 59% ownership, Shapir Engineering and Industry Ltd (TLV:SPEN) insiders have a lot at stake

Key Insights

• Insiders appear to have a vested interest in Shapir Engineering and Industry's growth, as seen by their sizeable ownership
• 59% of the business is held by the top 4 shareholders
• Institutions own 25% of Shapir Engineering and Industry

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A look at the shareholders of Shapir Engineering and Industry Ltd (TLV:SPEN) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of Shapir Engineering and Industry have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

Let's delve deeper into each type of owner of Shapir Engineering and Industry, beginning with the chart below.

Check out our latest analysis for Shapir Engineering and Industry

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

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.

We can see that Shapir Engineering and Industry does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Shapir Engineering and Industry's earnings history below. Of course, the future is what really matters.

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 Israel Shapira and Chen Shapira, with an equal amount of shares to their name at 15%. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders. Furthermore, CEO Harel Shapira is the owner of 15% of the company's shares.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shapir Engineering and Industry

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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. Given it has a market cap of ₪10b, that means insiders have a whopping ₪6.1b worth of shares in their own names. 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 16% 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Shapir Engineering and Industry (at least 2 which are concerning) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.