Delek Automotive Systems Ltd's (TLV:DLEA) most bullish insider is CEO Gil Agmon, and their holdings value went up by 7.1% last week

Key Insights

• Delek Automotive Systems' significant insider ownership suggests inherent interests in company's expansion
• 50% of the company is held by a single shareholder (Gil Agmon)
• Institutions own 28% of Delek Automotive Systems

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Every investor in Delek Automotive Systems Ltd (TLV:DLEA) should be aware of the most powerful shareholder groups. With 52% stake, individual insiders possess the maximum shares in the company. 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 7.1% gain.

In the chart below, we zoom in on the different ownership groups of Delek Automotive Systems.

Check out our latest analysis for Delek Automotive Systems

What Does The Institutional Ownership Tell Us About Delek Automotive Systems?

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.

We can see that Delek Automotive Systems does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Delek Automotive Systems' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Delek Automotive Systems. The company's CEO Gil Agmon is the largest shareholder with 50% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 12% and 6.2%, of the shares outstanding, respectively.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Delek Automotive Systems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own the majority of Delek Automotive Systems Ltd. This means they can collectively make decisions for the company. So they have a ₪1.4b stake in this ₪2.7b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Delek Automotive Systems better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Delek Automotive Systems you should be aware of, and 2 of them are concerning.

Of course this may not be the best stock to buy. So take a peek at this free 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.