The large shareholder groups of Sapiens International Corporation NV (NASDAQ:SPNS) have power over the company. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see a decline in insider participation in companies that were previously public.
With a market capitalization of $1.3 billion, Sapiens International is a decent size, so it’s probably on the radar of institutional investors. Our analysis of company ownership, below, shows that institutional investors have bought the company. Let’s dig deeper into each owner type to learn more about Sapiens International.
What does institutional ownership tell us about Sapiens International?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors hold a significant share of Sapiens International. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Sapiens International’s historical revenue and earnings below, but keep in mind there’s always more to tell.
Sapiens International does not belong to hedge funds. Our data shows that Formula Systems (1985) Ltd. is the main shareholder with 44% of the outstanding shares. With 5.7% and 4.3% of shares outstanding, respectively, Harel Insurance Investments and Finances Services Ltd, Asset Management Arm and The Phoenix Investment and Finances Ltd. are the second and third shareholders. Additionally, CEO Roni Al-Dor owns 0.8% of the company’s shares.
A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 54% stake.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Sapiens International Insider Ownership
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders hold less than 1% of Sapiens International Corporation NV in their own name. Keep in mind this is a big company and insiders own $9.4 million worth of stock. The absolute value can be more important than the proportional share. It’s always good to see at least one insider property, but it might be worth checking out if these insiders sold.
General public property
The general public, including retail investors, owns 23% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Ownership of a public company
Public companies currently own 44% of the shares of Sapiens International. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.
I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Take risks for example – Sapiens International has 1 warning sign we think you should know.
But finally it’s the future, not the past, which will determine the performance of the owners of this company. That’s why we think it’s advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to 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 figures for the full year.
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