With 64% ownership, Luther Burbank Corporation (NASDAQ:LBC) insiders have a lot at stake
Key Insights
Luther Burbank's significant insider ownership suggests inherent interests in company's expansion
The largest shareholder of the company is Victor Trione with a 63% stake
Every investor in Luther Burbank Corporation (NASDAQ:LBC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
Let's take a closer look to see what the different types of shareholders can tell us about Luther Burbank.
Check out our latest analysis for Luther Burbank
What Does The Institutional Ownership Tell Us About Luther Burbank?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Luther Burbank. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Luther Burbank's earnings history below. Of course, the future is what really matters.
Luther Burbank is not owned by hedge funds. Victor Trione is currently the largest shareholder, with 63% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 2.3% and 1.9%, of the shares outstanding, respectively.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Luther Burbank
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
It seems that insiders own more than half the Luther Burbank Corporation stock. This gives them a lot of power. Given it has a market cap of US$471m, that means they have US$303m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Luther Burbank has 2 warning signs (and 1 which is significant) we think you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
