With 73% institutional ownership, Heritage Commerce Corp (NASDAQ:HTBK) is a favorite amongst the big guns
Key Insights
Institutions' substantial holdings in Heritage Commerce implies that they have significant influence over the company's share price
The top 14 shareholders own 51% of the company
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Heritage Commerce Corp (NASDAQ:HTBK), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 73% ownership. 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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of Heritage Commerce, beginning with the chart below.
Check out our latest analysis for Heritage Commerce
What Does The Institutional Ownership Tell Us About Heritage Commerce?
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.
Heritage Commerce already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Heritage Commerce, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Heritage Commerce is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 13% of shares outstanding. T. Rowe Price Group, Inc. is the second largest shareholder owning 9.1% of common stock, and The Vanguard Group, Inc. holds about 5.1% of the company stock.
A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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 Heritage Commerce
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.
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.
We can see that insiders own shares in Heritage Commerce Corp. In their own names, insiders own US$22m worth of stock in the US$553m 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 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Heritage Commerce. 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:
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. For example, we've discovered 1 warning sign for Heritage Commerce that you should be aware of before investing here.
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.
