How Much Of Zvi Sarfati & Sons Investments & Constructions Ltd. (TLV:SRFT) Do Insiders Own?

A look at the shareholders of Zvi Sarfati & Sons Investments & Constructions Ltd. (TLV:SRFT) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of ₪350m, Zvi Sarfati & Sons Investments & Constructions is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Zvi Sarfati & Sons Investments & Constructions.

Check out our latest analysis for Zvi Sarfati & Sons Investments & Constructions

What Does The Institutional Ownership Tell Us About Zvi Sarfati & Sons Investments & Constructions?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Zvi Sarfati & Sons Investments & Constructions already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Zvi Sarfati & Sons Investments & Constructions, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Zvi Sarfati & Sons Investments & Constructions. The company's largest shareholder is Zvi Sarfati, with ownership of 36%. In comparison, the second and third largest shareholders hold about 19% and 8.1% of the stock. Moshe Sarfati, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Rafi Sarfati directly holds 8.1% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Zvi Sarfati & Sons Investments & Constructions

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own the majority of Zvi Sarfati & Sons Investments & Constructions Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of ₪350m, that means they have ₪183m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 14% ownership, the general public have some degree of sway over Zvi Sarfati & Sons Investments & Constructions. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 6.4%, of the Zvi Sarfati & Sons Investments & Constructions stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zvi Sarfati & Sons Investments & Constructions better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Zvi Sarfati & Sons Investments & Constructions (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

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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