In spite of recent selling, insiders still control 59% of HBT Financial, Inc. (NASDAQ:HBT)
Key Insights
HBT Financial's significant insider ownership suggests inherent interests in company's expansion
54% of the company is held by a single shareholder (Fred Drake)
Every investor in HBT Financial, Inc. (NASDAQ:HBT) should be aware of the most powerful shareholder groups. With 59% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And insiders own the top position in the company’s share registry despite recent sales.
In the chart below, we zoom in on the different ownership groups of HBT Financial.
See our latest analysis for HBT Financial
What Does The Institutional Ownership Tell Us About HBT Financial?
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 HBT Financial does have institutional investors; and they hold a good portion of the company's stock. 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. 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 HBT Financial's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in HBT Financial. The company's CEO Fred Drake is the largest shareholder with 54% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 3.8% of the shares outstanding, followed by an ownership of 3.1% by the third-largest shareholder. Interestingly, the third-largest shareholder, Roger Baker is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of HBT Financial
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.
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 information suggests that insiders own more than half of HBT Financial, Inc.. This gives them effective control of the company. That means they own US$349m worth of shares in the US$593m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HBT Financial. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for HBT Financial that you should be aware of.
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.
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