Institutions' substantial holdings in Northeast Community Bancorp implies that they have significant influence over the company's share price
A total of 18 investors have a majority stake in the company with 50% ownership
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
A look at the shareholders of Northeast Community Bancorp, Inc. (NASDAQ:NECB) can tell us which group is most powerful. With 60% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Northeast Community Bancorp.
What Does The Institutional Ownership Tell Us About Northeast Community Bancorp?
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.
Northeast Community Bancorp 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 Northeast Community Bancorp, (below). Of course, keep in mind that there are other factors to consider, too.
earnings-and-revenue-growth
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Northeast Community Bancorp is not owned by hedge funds. Northeast Community Bank Employee Stock Ownership Plan Trust is currently the company's largest shareholder with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.0% and 5.7%, of the shares outstanding, respectively. Additionally, the company's CEO Kenneth Martinek directly holds 2.4% of the total shares outstanding.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 18 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 Northeast Community Bancorp
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Shareholders would probably be interested to learn that insiders own shares in Northeast Community Bancorp, Inc.. In their own names, insiders own US$11m worth of stock in the US$204m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Northeast Community 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 Northeast Community Bancorp better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Northeast Community Bancorp .
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.
