Following a 3.7% decline over last year, recent gains may please Midland States Bancorp, Inc. (NASDAQ:MSBI) institutional owners
Key Insights
Given the large stake in the stock by institutions, Midland States Bancorp's stock price might be vulnerable to their trading decisions
50% of the business is held by the top 15 shareholders
A look at the shareholders of Midland States Bancorp, Inc. (NASDAQ:MSBI) can tell us which group is most powerful. The group holding the most number of shares in the company, around 56% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
After a year of 3.7% losses, last week’s 10% gain would be welcomed by institutional investors as a likely sign that returns might start trending higher.
Let's delve deeper into each type of owner of Midland States Bancorp, beginning with the chart below.
See our latest analysis for Midland States Bancorp
What Does The Institutional Ownership Tell Us About Midland States Bancorp?
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 Midland States Bancorp. 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. 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 Midland States Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 6.1% of Midland States Bancorp shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. BlackRock, Inc. is currently the company's largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.2% and 6.1%, of the shares outstanding, respectively. Furthermore, CEO Jeffrey Ludwig is the owner of 1.6% of the company's shares.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Midland States 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.
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 Midland States Bancorp, Inc.. As individuals, the insiders collectively own US$25m worth of the US$526m 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
The general public, who are usually individual investors, hold a 32% stake in Midland States Bancorp. 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 Midland States Bancorp better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Midland States Bancorp (including 1 which shouldn't be ignored) .
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.
