Advertisement
U.S. markets open in 6 hours 27 minutes
  • S&P Futures

    5,126.00
    -12.25 (-0.24%)
     
  • Dow Futures

    38,954.00
    -68.00 (-0.17%)
     
  • Nasdaq Futures

    18,173.50
    -88.50 (-0.48%)
     
  • Russell 2000 Futures

    2,069.90
    -5.90 (-0.28%)
     
  • Crude Oil

    78.30
    -0.44 (-0.56%)
     
  • Gold

    2,123.40
    -2.90 (-0.14%)
     
  • Silver

    24.08
    +0.09 (+0.39%)
     
  • EUR/USD

    1.0853
    -0.0006 (-0.05%)
     
  • 10-Yr Bond

    4.2190
    0.0000 (0.00%)
     
  • Vix

    13.49
    +0.38 (+2.90%)
     
  • GBP/USD

    1.2682
    -0.0011 (-0.09%)
     
  • USD/JPY

    150.4020
    -0.0260 (-0.02%)
     
  • Bitcoin USD

    66,363.43
    +2,239.94 (+3.49%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,640.33
    0.00 (0.00%)
     
  • Nikkei 225

    40,097.63
    -11.57 (-0.03%)
     

Individual investors account for 46% of West Bancorporation, Inc.'s (NASDAQ:WTBA) ownership, while institutions account for 44%

Key Insights

  • Significant control over West Bancorporation by individual investors implies that the general public has more power to influence management and governance-related decisions

  • The top 25 shareholders own 49% of the company

  • Institutional ownership in West Bancorporation is 44%

A look at the shareholders of West Bancorporation, Inc. (NASDAQ:WTBA) can tell us which group is most powerful. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, institutions make up 44% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of West Bancorporation.

Check out our latest analysis for West Bancorporation

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About West Bancorporation?

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 West Bancorporation does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 West Bancorporation's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

We note that hedge funds don't have a meaningful investment in West Bancorporation. Looking at our data, we can see that the largest shareholder is FMR LLC with 8.3% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 6.7% of common stock, and Jay Newlin Trust holds about 6.2% of the company stock. Furthermore, CEO David Nelson is the owner of 1.0% of the company's shares.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of West Bancorporation

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.

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.

Shareholders would probably be interested to learn that insiders own shares in West Bancorporation, Inc.. In their own names, insiders own US$14m worth of stock in the US$301m 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, who are usually individual investors, hold a 46% stake in West Bancorporation. 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.

Private Company Ownership

Our data indicates that Private Companies hold 6.2%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 - West Bancorporation has 1 warning sign we think you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Advertisement