Institutions own 35% of Sapiens International Corporation N.V. (NASDAQ:SPNS) shares but public companies control 44% of the company
To get a sense of who is truly in control of Sapiens International Corporation N.V. (NASDAQ:SPNS), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 35% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let's delve deeper into each type of owner of Sapiens International, beginning with the chart below.
View our latest analysis for Sapiens International
What Does The 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'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 Sapiens International. 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 Sapiens International's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Sapiens International. The company's largest shareholder is Formula Systems (1985) Ltd., with ownership of 44%. For context, the second largest shareholder holds about 5.7% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. In addition, we found that Roni Al-Dor, the CEO has 0.8% of the shares allocated to their name.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Sapiens International
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data suggests that insiders own under 1% of Sapiens International Corporation N.V. in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$7.8m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 21% stake in Sapiens International. 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.
Public Company Ownership
Public companies currently own 44% of Sapiens International stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
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. Take risks for example - Sapiens International has 1 warning sign we think you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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