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Could The Community Trust Bancorp, Inc. (NASDAQ:CTBI) Ownership Structure Tell Us Something Useful?

Simply Wall St
·4 mins read

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If you want to know who really controls Community Trust Bancorp, Inc. (NASDAQ:CTBI), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of US$593m, Community Trust Bancorp is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Community Trust Bancorp.

See our latest analysis for Community Trust Bancorp

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Community Trust Bancorp?

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 Community Trust Bancorp. 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 Community Trust Bancorp's earnings history, below. Of course, the future is what really matters.

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. Hedge funds don't have many shares in Community Trust Bancorp. The company's largest shareholder is Community Trust and Investment Company, with ownership of 10.0%. In comparison, the second and third largest shareholders hold about 7.2% and 6.6% of the stock. In addition, we found that Jean Hale, the CEO has 0.0134322 of the shares allocated to his name

A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 51% implying that no one share holder 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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Community Trust Bancorp

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.

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.

We can see that insiders own shares in Community Trust Bancorp, Inc.. In their own names, insiders own US$30m worth of stock in the US$593m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 33% stake in CTBI. 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 Community Trust Bancorp better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Community Trust Bancorp you should know about.

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.

This article by Simply Wall St is general in nature. 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.