MEITAV INVESTMENT HOUSE LTD Reduces Stake in Formula Systems (1985) Ltd
On August 16, 2023, MEITAV INVESTMENT HOUSE LTD, a renowned investment firm, reduced its stake in Formula Systems (1985) Ltd. (NASDAQ:FORTY). This article aims to provide a comprehensive analysis of this transaction, the profiles of the firm and the traded company, and the potential implications for both parties.
Details of the Transaction
MEITAV INVESTMENT HOUSE LTD sold 21,846 shares of Formula Systems (1985) Ltd at a price of $73.68 per share. This transaction resulted in a -2.85% change in the firm's holdings, reducing its total shares in the company to 744,848. The impact on the firm's portfolio was -0.01%, bringing the position of the traded stock in the guru's portfolio to 0.44%. The firm now holds a 4.86% stake in Formula Systems (1985) Ltd.
Profile of the Firm
MEITAV INVESTMENT HOUSE LTD is a leading investment firm based in Bene-Beraq, Israel. The firm manages a portfolio of 674 stocks, with a total equity of $12.45 billion. Its top holdings include S&P 500 ETF TRUST ETF (SPY), Vanguard S&P 500 ETF (VOO), Financial Select Sector SPDR (XLF), Health Care Select Sector SPDR (XLV), and INVESCO QQQ Trust (NASDAQ:QQQ). The firm's top sectors are Technology and Financial Services.
Overview of the Traded Company
Formula Systems (1985) Ltd (NASDAQ:FORTY), based in Israel, is a holding company that provides information technology services through its subsidiaries. The company's segments include Adjustments, Magic Software Enterprises Ltd. (Magic Software), Matrix IT Ltd. (Matrix), Michpal Micro Computers (1983) Ltd. (Michpal), Other, Sapiens International Corporation N.V. (Sapiens), and Zap Group Ltd. (Zap Group). The company's market capitalization is $1.13 billion, and its current stock price is $73.68. The company's PE percentage is 14.12, indicating a profitable operation.
GuruFocus Valuation of the Stock
According to GuruFocus valuation, Formula Systems (1985) Ltd is modestly undervalued, with a GF Value of $105.60. The price to GF Value ratio is 0.72, suggesting a sufficient margin of safety. The stock has not gained since the transaction, but it has seen a 101.86% increase since its IPO and a 4.36% increase year-to-date.
GuruFocus Score and Ranking of the Stock
The stock has a GF Score of 94/100, indicating a high outperformance potential. It has a Balance Sheet Rank of 6/10, a Profitability Rank of 9/10, a Growth Rank of 10/10, a GF Value Rank of 9/10, and a Momentum Rank of 5/10. The stock's Piotroski F-Score is 5, its Altman Z score is 1.84, and its cash to debt ratio is 0.69.
Performance of the Stock
Formula Systems (1985) Ltd operates in the software industry. It has an interest coverage of 11.22, a ROE of 14.74, and a ROA of 2.95. The company has seen a gross margin growth of 1.90 and an operating margin growth of 9.50. Over the past three years, the company's revenue, EBITDA, and earnings have grown by 14.40%, 20.10%, and 28.80% respectively.
Conclusion
In conclusion, MEITAV INVESTMENT HOUSE LTD's recent reduction in its stake in Formula Systems (1985) Ltd is a significant move that could have implications for both the guru and the traded company. Despite the reduction, the firm still holds a substantial stake in the company, indicating its continued confidence in the company's prospects. The transaction also reflects the firm's strategic portfolio management and its commitment to maximizing returns for its clients.
This article first appeared on GuruFocus.
