Retail investors who hold 36% of First Financial Northwest, Inc. (NASDAQ:FFNW) gained 46%, institutions profited as well
Key Insights
First Financial Northwest's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
A total of 9 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of First Financial Northwest, Inc. (NASDAQ:FFNW), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While retail investors were the group that benefitted the most from last week’s US$59m market cap gain, institutions too had a 30% share in those profits.
Let's take a closer look to see what the different types of shareholders can tell us about First Financial Northwest.
View our latest analysis for First Financial Northwest
What Does The Institutional Ownership Tell Us About First Financial Northwest?
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 Financial Northwest 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 Financial Northwest, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 11% of First Financial Northwest. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that First Financial Northwest Foundation, Endowment Arm is the largest shareholder with 9.6% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.0% and 8.2%, of the shares outstanding, respectively. Additionally, the company's CEO Joseph Kiley directly holds 0.6% of the total shares outstanding.
We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of First Financial Northwest
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
We can see that insiders own shares in First Financial Northwest, Inc.. In their own names, insiders own US$6.4m worth of stock in the US$125m 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 36% stake in First Financial Northwest. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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 - First Financial Northwest has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
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.
