Yahoo Finance ServisFirst Bancshares, Inc. (NYSE:SFBS) is favoured by institutional owners who hold 66% of the company
Key Insights
Significantly high institutional ownership implies ServisFirst Bancshares' stock price is sensitive to their trading actions
A total of 13 investors have a majority stake in the company with 51% ownership
A look at the shareholders of ServisFirst Bancshares, Inc. (NYSE:SFBS) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of ServisFirst Bancshares.
See our latest analysis for ServisFirst Bancshares
What Does The Institutional Ownership Tell Us About ServisFirst 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 ServisFirst 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of ServisFirst Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. ServisFirst Bancshares is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 14% of shares outstanding. With 9.9% and 5.1% of the shares outstanding respectively, The Vanguard Group, Inc. and Kayne Anderson Rudnick Investment Management, LLC are the second and third largest shareholders. In addition, we found that Thomas Broughton, the CEO has 3.0% of the shares allocated to their name.
After doing some more digging, we found that the top 13 have the combined ownership of 51% 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 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 ServisFirst Bancshares
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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
We can see that insiders own shares in ServisFirst Bancshares, Inc.. The insiders have a meaningful stake worth US$268m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in ServisFirst Bancshares. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand ServisFirst Bancshares better, we need to consider many other factors. For example, we've discovered 2 warning signs for ServisFirst Bancshares (1 is concerning!) that you should be aware of before investing here.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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