Yahoo Finance Magic Software Enterprises Ltd.'s (NASDAQ:MGIC) top owners are public companies with 46% stake, while 27% is held by institutions
To get a sense of who is truly in control of Magic Software Enterprises Ltd. (NASDAQ:MGIC), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 27% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of Magic Software Enterprises, beginning with the chart below.
View our latest analysis for Magic Software Enterprises
What Does The Institutional Ownership Tell Us About Magic Software Enterprises?
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 Magic Software Enterprises 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 Magic Software Enterprises' earnings history below. Of course, the future is what really matters.
Magic Software Enterprises is not owned by hedge funds. Formula Systems (1985) Ltd. is currently the company's largest shareholder with 46% of shares outstanding. With 5.1% and 4.9% of the shares outstanding respectively, Harel Insurance Investments and Finances Services Ltd, Asset Management Arm and Clal Financial Management Ltd are the second and third largest shareholders.
To make our study more interesting, we found that the top 2 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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Magic Software Enterprises
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that Magic Software Enterprises Ltd. insiders own under 1% of the company. It has a market capitalization of just US$797m, and the board has only US$3.9m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Magic Software Enterprises. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 46% of the Magic Software Enterprises shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Magic Software Enterprises better, we need to consider many other factors. Be aware that Magic Software Enterprises is showing 1 warning sign in our investment analysis , you should know about...
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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