Here's Why We Think Menora Mivtachim Holdings (TLV:MMHD) Is Well Worth Watching
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Menora Mivtachim Holdings (TLV:MMHD). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
Menora Mivtachim Holdings' Improving Profits
In the last three years Menora Mivtachim Holdings' earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Menora Mivtachim Holdings' EPS skyrocketed from ₪27.64 to ₪38.91, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 41%.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. The good news is that Menora Mivtachim Holdings is growing revenues, and EBIT margins improved by 3.4 percentage points to 37%, over the last year. Ticking those two boxes is a good sign of growth, in our book.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
See our latest analysis for Menora Mivtachim Holdings
While profitability drives the upside, prudent investors always check the balance sheet, too.
Are Menora Mivtachim Holdings Insiders Aligned With All Shareholders?
Since Menora Mivtachim Holdings has a market capitalisation of ₪31b, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth ₪846m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.
While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. A brief analysis of the CEO compensation suggests they are. The median total compensation for CEOs of companies similar in size to Menora Mivtachim Holdings, with market caps over ₪25b, is around ₪4.4m.
Menora Mivtachim Holdings offered total compensation worth ₪3.8m to its CEO in the year to December 2025. That comes in below the average for similar sized companies and seems pretty reasonable. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.
Does Menora Mivtachim Holdings Deserve A Spot On Your Watchlist?
For growth investors, Menora Mivtachim Holdings' raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. This may only be a fast rundown, but the key takeaway is that Menora Mivtachim Holdings is worth keeping an eye on. It is worth noting though that we have found 1 warning sign for Menora Mivtachim Holdings that you need to take into consideration.
Although Menora Mivtachim Holdings certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Israeli companies that not only boast of strong growth but have strong insider backing.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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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.