individual investors who own 60% along with institutions invested in First United Corporation (NASDAQ:FUNC) saw increase in their holdings value last week
Key Insights
Significant control over First United by individual investors implies that the general public has more power to influence management and governance-related decisions
36% of the business is held by the top 25 shareholders
If you want to know who really controls First United Corporation (NASDAQ:FUNC), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors gained the most after market cap touched US$104m last week, while institutions who own 32% also benefitted.
Let's take a closer look to see what the different types of shareholders can tell us about First United.
See our latest analysis for First United
What Does The Institutional Ownership Tell Us About First United?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
First United 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 First United, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in First United. Looking at our data, we can see that the largest shareholder is Dimensional Fund Advisors LP with 5.0% of shares outstanding. For context, the second largest shareholder holds about 4.5% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. Furthermore, CEO Carissa Rodeheaver is the owner of 0.6% of the company's shares.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 First United
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.
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.
Our most recent data indicates that insiders own some shares in First United Corporation. In their own names, insiders own US$8.3m worth of stock in the US$104m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 60% stake in First United, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
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. Be aware that First United is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
