Yahoo Finance Shore Bancshares, Inc. (NASDAQ:SHBI) has caught the attention of institutional investors who hold a sizeable 45% stake
Key Insights
Institutions' substantial holdings in Shore Bancshares implies that they have significant influence over the company's share price
A total of 22 investors have a majority stake in the company with 50% ownership
If you want to know who really controls Shore Bancshares, Inc. (NASDAQ:SHBI), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 45% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Shore Bancshares.
See our latest analysis for Shore Bancshares
What Does The Institutional Ownership Tell Us About Shore 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 Shore Bancshares does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shore Bancshares' historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 9.6% of Shore Bancshares shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Fourthstone LLC, with ownership of 9.6%. With 8.9% and 5.3% of the shares outstanding respectively, BlackRock, Inc. and Alan Hyatt are the second and third largest shareholders. Alan Hyatt, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
After doing some more digging, we found that the top 22 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Shore Bancshares
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in Shore Bancshares, Inc.. As individuals, the insiders collectively own US$35m worth of the US$380m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shore 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 Shore Bancshares better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Shore Bancshares you should be aware of, and 1 of them is potentially serious.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
