Great week for Enterprise Financial Services Corp (NASDAQ:EFSC) institutional investors after losing 23% over the previous year
Key Insights
Institutions' substantial holdings in Enterprise Financial Services implies that they have significant influence over the company's share price
A total of 16 investors have a majority stake in the company with 51% ownership
If you want to know who really controls Enterprise Financial Services Corp (NASDAQ:EFSC), then you'll have to look at the makeup of its share registry. With 74% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutional investors would probably welcome last week's 4.9% increase in the share price after a year of 23% losses as a sign that returns may to begin trending higher.
Let's take a closer look to see what the different types of shareholders can tell us about Enterprise Financial Services.
View our latest analysis for Enterprise Financial Services
What Does The Institutional Ownership Tell Us About Enterprise Financial Services?
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.
We can see that Enterprise Financial Services 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. 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 Enterprise Financial Services' 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. Enterprise Financial Services is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.1% and 5.4%, of the shares outstanding, respectively.
A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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 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 Enterprise Financial Services
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Enterprise Financial Services Corp. The insiders have a meaningful stake worth US$67m. 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 22% stake in Enterprise Financial Services. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Enterprise Financial Services better, we need to consider many other factors. Take risks for example - Enterprise Financial Services has 1 warning sign we think you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
