While hedge funds own 29% of Sound Financial Bancorp, Inc. (NASDAQ:SFBC), retail investors are its largest shareholders with 41% ownership
Key Insights
The considerable ownership by retail investors in Sound Financial Bancorp indicates that they collectively have a greater say in management and business strategy
51% of the business is held by the top 12 shareholders
Every investor in Sound Financial Bancorp, Inc. (NASDAQ:SFBC) should be aware of the most powerful shareholder groups. With 41% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Hedge funds, on the other hand, account for 29% of the company's stockholders.
Let's delve deeper into each type of owner of Sound Financial Bancorp, beginning with the chart below.
See our latest analysis for Sound Financial Bancorp
What Does The Institutional Ownership Tell Us About Sound Financial Bancorp?
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.
As you can see, institutional investors have a fair amount of stake in Sound Financial Bancorp. 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 Sound Financial Bancorp, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 29% of Sound Financial Bancorp. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Stilwell Value LLC is currently the company's largest shareholder with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.0% and 5.3% of the stock. Furthermore, CEO Laura Stewart is the owner of 3.5% 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Sound Financial Bancorp
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 most recent data indicates that insiders own a reasonable proportion of Sound Financial Bancorp, Inc.. Insiders own US$11m worth of shares in the US$102m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sound Financial Bancorp. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Sound Financial Bancorp better, we need to consider many other factors. Be aware that Sound Financial Bancorp is showing 2 warning signs in our investment analysis , you should know about...
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
