While insiders own 33% of Red River Bancshares, Inc. (NASDAQ:RRBI), retail investors are its largest shareholders with 46% ownership
Key Insights
Significant control over Red River Bancshares by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 25 shareholders own 50% of the company
To get a sense of who is truly in control of Red River Bancshares, Inc. (NASDAQ:RRBI), 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 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Individual insiders, on the other hand, account for 33% of the company's stockholders. 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 Red River Bancshares.
View our latest analysis for Red River Bancshares
What Does The Institutional Ownership Tell Us About Red River Bancshares?
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 Red River Bancshares does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Red River Bancshares' earnings history below. Of course, the future is what really matters.
Red River Bancshares is not owned by hedge funds. The company's largest shareholder is Simeon Thibeaux, with ownership of 12%. Teddy Price is the second largest shareholder owning 6.1% of common stock, and John Simpson holds about 5.7% of the company stock. Additionally, the company's CEO Ronald Chatelain directly holds 2.3% of the total shares outstanding.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 25 shareholders, meaning that no single shareholder has a majority interest in the ownership.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Red River 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.
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 Red River Bancshares, Inc.. It has a market capitalization of just US$362m, and insiders have US$118m worth of shares in their own names. 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 46% 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Red River Bancshares better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Red River Bancshares you should be aware of.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
