Retail investors account for 40% of Community West Bancshares' (NASDAQ:CWBC) ownership, while institutions account for 28%
Key Insights
Community West Bancshares' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 12 shareholders own 51% of the company
If you want to know who really controls Community West Bancshares (NASDAQ:CWBC), 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 retail investors with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, institutions make up 28% of the company’s shareholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's take a closer look to see what the different types of shareholders can tell us about Community West Bancshares.
See our latest analysis for Community West Bancshares
What Does The Institutional Ownership Tell Us About Community West Bancshares?
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.
Community West Bancshares 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Community West Bancshares' earnings history below. Of course, the future is what really matters.
It looks like hedge funds own 7.2% of Community West Bancshares shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that William Peeples is the largest shareholder with 9.3% of shares outstanding. PL Capital Advisors, LLC is the second largest shareholder owning 7.2% of common stock, and First Securities America, Inc. holds about 6.4% of the company stock. Furthermore, CEO Martin Plourd is the owner of 1.3% of the company's shares.
After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
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 Community West Bancshares
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.
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.
Our information suggests that insiders maintain a significant holding in Community West Bancshares. Insiders have a US$25m stake in this US$104m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 40% stake in the company, and hence can't easily be ignored. 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:
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 Community West Bancshares is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
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.
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