Community Financial System, Inc. (NYSE:CBU) is a favorite amongst institutional investors who own 72%
In This Article:
Key Insights
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Institutions' substantial holdings in Community Financial System implies that they have significant influence over the company's share price
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The top 8 shareholders own 50% of the company
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Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
Every investor in Community Financial System, Inc. (NYSE:CBU) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 72% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
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.
In the chart below, we zoom in on the different ownership groups of Community Financial System.
Check out our latest analysis for Community Financial System
What Does The Institutional Ownership Tell Us About Community Financial System?
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.
Community Financial System already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Community Financial System, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Community Financial System. Our data shows that BlackRock, Inc. is the largest shareholder with 14% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 6.9% of the stock.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.