Advertisement
UK markets open in 30 minutes
  • NIKKEI 225

    38,596.47
    -36.55 (-0.09%)
     
  • HANG SENG

    18,085.74
    -249.58 (-1.36%)
     
  • CRUDE OIL

    82.34
    +0.17 (+0.21%)
     
  • GOLD FUTURES

    2,375.90
    +6.90 (+0.29%)
     
  • DOW

    39,134.76
    +299.90 (+0.77%)
     
  • Bitcoin GBP

    50,991.78
    -717.96 (-1.39%)
     
  • CMC Crypto 200

    1,355.33
    -4.99 (-0.37%)
     
  • NASDAQ Composite

    17,721.59
    -140.64 (-0.79%)
     
  • UK FTSE All Share

    4,508.44
    +35.07 (+0.78%)
     

Cullen/Frost Bankers, Inc. (NYSE:CFR) is a favorite amongst institutional investors who own 72%

Key Insights

  • Institutions' substantial holdings in Cullen/Frost Bankers implies that they have significant influence over the company's share price

  • A total of 10 investors have a majority stake in the company with 52% ownership

  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Cullen/Frost Bankers, Inc. (NYSE:CFR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 72% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

ADVERTISEMENT

In the chart below, we zoom in on the different ownership groups of Cullen/Frost Bankers.

View our latest analysis for Cullen/Frost Bankers

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Cullen/Frost Bankers?

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.

As you can see, institutional investors have a fair amount of stake in Cullen/Frost Bankers. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Cullen/Frost Bankers' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 11% of Cullen/Frost Bankers shares are controlled by hedge funds. 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. Aristotle Capital Management, LLC is currently the company's largest shareholder with 11% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 9.9% of common stock, and BlackRock, Inc. holds about 8.9% of the company stock.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Cullen/Frost Bankers

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own some shares in Cullen/Frost Bankers, Inc.. The insiders have a meaningful stake worth US$242m. Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Cullen/Frost Bankers. 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 Cullen/Frost Bankers better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here