Yahoo Finance With 66% ownership of the shares, First Citizens BancShares, Inc. (NASDAQ:FCNC.A) is heavily dominated by institutional owners
Key Insights
Institutions' substantial holdings in First Citizens BancShares implies that they have significant influence over the company's share price
The top 12 shareholders own 52% of the company
A look at the shareholders of First Citizens BancShares, Inc. (NASDAQ:FCNC.A) can tell us which group is most powerful. The group holding the most number of shares in the company, around 66% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about First Citizens BancShares.
View our latest analysis for First Citizens BancShares
What Does The Institutional Ownership Tell Us About First Citizens BancShares?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that First Citizens BancShares 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see First Citizens BancShares' historic earnings and revenue below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in First Citizens BancShares. With a 11% stake, CEO Frank Holding is the largest shareholder. In comparison, the second and third largest shareholders hold about 9.0% and 6.8% of the stock.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 52% implying that no single shareholder has a majority.
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 First Citizens BancShares
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 insiders maintain a significant holding in First Citizens BancShares, Inc.. It is very interesting to see that insiders have a meaningful US$4.6b stake in this US$20b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over First Citizens BancShares. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand First Citizens BancShares better, we need to consider many other factors. For example, we've discovered 2 warning signs for First Citizens BancShares (1 can't be ignored!) that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
