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Full guide on how to buy Israeli stocks - The easy way

(Photo: Shutterstock)

So you're a Non Israeli citizen but you want to financially get behind Israeli innovative companies... Look no further. As part of the Invest in Israel series, we simplify the journey of investing in Israel, without providing investment advice and guidance.

This can simply mean picking individual companies you want to invest in, but there are other options available too. You can buy shares in an ETF, sign up to an automated investment platform, buy and sell stock CFDs, or use your bank account to open a stocks-savings account. Choose which approach suits your budget and your goals best.

Sign up for one of the best Israel trading platforms

To invest in stocks from Israel, you need to create an account with one of the online brokers. Why not buy stocks in an award winning broker with an easy to use website and app, Etoro, founded Israeli serial entrepreneurs. You can open an account for as little as $100.

Creating an account typically only takes a few minutes, but you will need to supply some government-issued ID, like a passport or driving licence as part of the process.

The top brokers use modern technology that can verify your identity based on these documents in minutes, so once you’ve uploaded your details you should be approved and ready to start buying stocks very quickly.

Place your order to purchase stocks

Log into your brokerage account, search for the stock you want to buy, and enter your order details.

Those details include how many stocks you want to buy and the price at which you want to purchase them. Once you’ve done that, confirm the order.

As soon as the order is executed, you can find your shares in your account portfolio, where you can track their price and decide when you want to sell.

Where to buy stocks in Israel

These are our top ranked stock brokers for Israeli investors. They each offer an inexpensive and convenient way to invest in shares in Israel, combined with top-tier regulation from the Israel Securities Authority (ISA)

What to consider before buying stocks in Israel

Take some time to decide your ultimate investing goal and set yourself a budget before you buy any stocks. Are you investing for retirement, to create a new source of income, or to grow your pot in preparation for a big purchase?

Do you want to be an active investor, actively choosing which stocks to buy, or are you happy to let someone else make the decisions for you?

The answers should influence how you invest. With a long time horizon, you can afford to start with a smaller pot, while investment strategies that aim to generate steady returns in line with the Israeli stock market are more appealing.

With a shorter time frame, you may need to be more active in picking your own stocks to buy in Israel in an attempt to ‘beat’ the market.

How much money do I need to buy shares in Israeli stocks?

The equivalent of $10 is usually enough to meet the minimum deposit requirements with a stock broker. You can start investing with a small amount, though you might be better off buying shares in an ETF or using a robo advisor as opposed to spending it all on one stock.

If you have a smaller budget, then you can build it up by rounding up your spare change into an investment pot (there are investment apps that can do this for you), by setting up regular deposits, or by investing in stocks that you can earn extra income from in the form of dividends.

To start building your own portfolio, you may want the equivalent of about $100, so that you can spread your risk by buying a few different stocks, but there’s no ‘right’ amount that you must have.

How much does it cost to buy shares in Israel?

Many share dealing platforms offer commission-free trading, making it possible to buy stock in Israel with no fees or commissions. It’s more common to find platforms that charge you through the ‘spread’, which is the difference between the buy and sell price of a stock. Here’s a comparison of the types of fee each of the top platforms in Israel charge.

The different ways to invest in stocks in Israel

Buying stocks in Israel can mean a few different things. You can, of course, buy shares in a company you like, but there are lots of investment strategies that are designed specifically for beginners who don’t have the desire or the expertise to pick their own stocks.

Here is a summary of the various options open to you, and what type of investor they’re most suited for.

  • Buy individual stocks. The traditional way to invest in Israel. The two largest Israeli founded companies by Market Capitalisation are Mobileye, and Teva Pharmaceutical Industries. You can download the full list of Israeli founded companies on Israel Stock List Ebook updated Research a company’s performance and buy shares in it, with the goal of selling your stocks later at a higher price. This approach is best if you have some experience of the stock market already, and/or the time to research lots of companies to find the right investment.

  • Buy shares in an ETF. An ETF (exchange-traded fund) is a fund that contains lots of stocks grouped together. You can buy shares in an ETF like you would a single company, but instead of a share in one business you get a share of lots of businesses. ETFs are ideal for investing in the Israeli stock market as a whole, or for anyone who doesn’t have the time or experience to pick individual stocks..

(Photo: Shutterstock)

What are the best stocks to buy in Israel?

The right answer is different for every person and is constantly changing, depending on the stock price and the economic situation in Israel. Ultimately, you want to find stocks that will be worth more in the future than the price you pay for them now. For a full list of all the Israeli founded companies now listed on the international stock exchanges, then you can download a copy of the Israel Stock List Ebook updated for only $9

Companies on the stock exchange are often valued based on a set of criteria, such as how much money they make every year, how big the market for their product or service could be, and whether they pay out dividends.

Here are some terms and metrics to be aware of when you’re deciding which stocks to buy.

Market capitalization

Market capitalization, often referred to as market cap, is the total market value of a company’s outstanding shares. It’s calculated by multiplying the current stock price by the total number of outstanding shares.

For investors, market cap is crucial as it helps in assessing a company’s size, growth potential, and risk level. Larger companies (with higher market caps) are typically more stable, while smaller companies (with lower market caps) may offer higher growth potential but with increased risk.

Net income/earnings

Net income, also known as net earnings, is the profit a company earns after deducting all its expenses, taxes, and costs. It’s a key indicator of a company’s financial health and profitability.

Investors pay close attention to net income as it directly impacts the company’s earnings per share (EPS), and is often used to determine a company’s value and performance. Consistent growth in net income is generally seen as a positive sign for future stock performance.

Earnings per share

Earnings per share (EPS) is a financial metric indicating how much profit a company makes per share of its stock. It’s calculated by dividing the company’s net income by its total number of outstanding shares.

EPS is crucial for investors as it offers a clear measure of a company’s profitability and efficiency in generating profits. It’s widely used for comparing the financial performance of different companies, especially within the same industry. Consistent growth in EPS is often seen as a positive sign.

P/E ratio

The P/E (price to earnings) ratio is a valuation metric that compares a company’s current share price to its per-share earnings. It’s calculated by dividing the market value per share by the earnings per share.

Investors use this as a way to evaluate whether a stock is overvalued or undervalued in relation to its earnings. A high P/E ratio could indicate that a stock’s price is high compared to earnings and possibly overvalued, while a low P/E ratio might suggest a stock is undervalued.

Dividend yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It’s calculated as the annual dividends per share divided by the price per share and is usually displayed as a percentage.

For stock investors in Israel, particularly those seeking regular income, the dividend yield is a key factor to consider. It provides an idea of the income they can expect from an investment in a stock, independent of market price fluctuations.

Free cash flow

Free cash flow (FCF) is the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. It’s a measure of a company’s financial performance and health, indicating the amount of cash it has available for expansion, dividend payments, and debt reduction, among other activities.

For investors, a positive and growing free cash flow is typically a good sign, suggesting the company has healthy financials and the potential for growth and dividend payouts.

Is there a quick way to analyse Israel Stocks

TipRanks is an Israeli investment analysis platform for retail investors because it simplifies the complex world of stock market analysis. Here's why:

  • Analyst Expertise: TipRanks aggregates ratings and price targets from thousands of Wall Street analysts, giving you insights usually reserved for big institutions.

  • Transparency: See how analysts' track records stack up with their Smart Score, a unique rating system that measures their success and accuracy.

  • Data-Driven Decisions: Tools like the stock screener and comparison tools let you filter stocks by metrics that matter to your investing strategy.

  • Financial News & Insights: Stay current on market trends and individual stocks with news, blogs, and expert commentary.

Can I buy stocks in Israeli Founded Companies?

Yes, typically an online broker offers many more international stocks and you aren’t limited to local Israeli stocks. Most investors want the option to invest in the biggest brand names, so online trading platforms that are designed to attract casual investors make sure to offer those stocks.

That means you are likely to find lots of stocks from the US market as well as other leading companies around the world, though the exact range on offer depends on the broker you sign up to.

In addition, there may be a number of different ways to buy or trade international stocks, depending on the broker you choose. You may be able to buy the underlying asset, which is akin to traditional investing where you become a shareholder in the company.

More common is the ability to buy and sell derivatives, such as CFDs or options, which are financial products that get their value from an underlying asset (in this case, a stock). These are more speculative but give you flexibility by catering to strategies that include using leverage or shorting stocks.

Writer - Jon Simmons - Bi-lateral trade an investment advocate for Israel and its supporters, content strategist for ambitious businesses looking to grow online.

The Israel Stock Tracker Updated allows you to not only discover but also track the stock price of all of the Israeli-founded companies listed on the New York Stock Exchange, NASDAQ, and London Stock Exchange. The spreadsheet tracker brings simplicity to buying Israeli stocks, and is available for only $59.99.

The Israel Stock List Ebook updated is now available at an introductory price of only $9. This simple eBook provides a comprehensive list of all the Israeli-founded companies that can be purchased on the international markets.

Purchase stocks in Israeli Founded Companies at Israeli-founded brokerage, Etoro, and join the millions of stock investors worldwide. Investors can buy stocks for as little as $100 deposit. Founded by serial Israeli brothers Yoni Assia and Ronen Assia

TipRanks is a comprehensive research platform, founded by Israeli entrepreneurs, Uri Gruenbaum and Gilad Gat in 2012, that helps investors make better, data-driven investment decisions. So can sign up for a free trial here. This platform does much of the analysis work for investors.

Want to be kept up to date on future articles on how to support Israeli Businesses? Subscribe to the Open Invest Newsletter for free today. Also offering specialist Israeli immigration lawyers.

Jon Simmons is a bi-lateral trade investment advocate for Israel and its supporters, and content strategist for ambitious businesses looking to grow online.

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