Advertisement
U.S. markets open in 1 hour 10 minutes
  • S&P Futures

    5,306.75
    -1.50 (-0.03%)
     
  • Dow Futures

    40,151.00
    +7.00 (+0.02%)
     
  • Nasdaq Futures

    18,498.75
    -5.00 (-0.03%)
     
  • Russell 2000 Futures

    2,140.40
    +2.00 (+0.09%)
     
  • Crude Oil

    82.50
    +1.15 (+1.41%)
     
  • Gold

    2,234.30
    +21.60 (+0.98%)
     
  • Silver

    24.70
    -0.05 (-0.21%)
     
  • EUR/USD

    1.0789
    -0.0041 (-0.38%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.01
    +0.23 (+1.80%)
     
  • dólar/libra

    1.2620
    -0.0018 (-0.14%)
     
  • USD/JPY

    151.3010
    +0.0550 (+0.04%)
     
  • Bitcoin USD

    70,468.07
    +305.84 (+0.44%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.37
    +20.39 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Institutions own 31% of Summit Financial Group, Inc. (NASDAQ:SMMF) shares but individual investors control 50% of the company

Key Insights

  • Summit Financial Group's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public

  • The top 25 shareholders own 42% of the company

  • Insiders have bought recently

If you want to know who really controls Summit Financial Group, Inc. (NASDAQ:SMMF), then you'll have to look at the makeup of its share registry. With 50% stake, individual investors 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.

Institutions, on the other hand, account for 31% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of Summit Financial Group.

See our latest analysis for Summit Financial Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Summit Financial Group?

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.

Summit Financial Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Summit Financial Group, (below). Of course, keep in mind that there are other factors to consider, too.

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

We note that hedge funds don't have a meaningful investment in Summit Financial Group. BlackRock, Inc. is currently the largest shareholder, with 5.9% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.8% and 4.0% of the stock. Gary Hinkle, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO H. Maddy directly holds 0.9% of the total shares outstanding.

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 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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Summit Financial Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our information suggests that insiders maintain a significant holding in Summit Financial Group, Inc.. Insiders own US$41m worth of shares in the US$328m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Summit Financial Group. 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 Equity Ownership

With an ownership of 5.8%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Summit Financial Group , and understanding them should be part of your investment process.

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.

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

Advertisement