Institutional owners may consider drastic measures as Blue Foundry Bancorp's (NASDAQ:BLFY) recent US$25m drop adds to long-term losses

Key Insights

• Given the large stake in the stock by institutions, Blue Foundry Bancorp's stock price might be vulnerable to their trading decisions
• A total of 8 investors have a majority stake in the company with 52% ownership
• Recent sales by insiders

A look at the shareholders of Blue Foundry Bancorp (NASDAQ:BLFY) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors saw their holdings value drop by 12% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 17% might not go down well especially with this category of shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Blue Foundry Bancorp which might hurt individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Blue Foundry Bancorp.

Check out our latest analysis for Blue Foundry Bancorp

What Does The Institutional Ownership Tell Us About Blue Foundry 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.

Blue Foundry Bancorp already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Blue Foundry Bancorp's earnings history below. Of course, the future is what really matters.

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 Blue Foundry Bancorp. T. Rowe Price Group, Inc. is currently the largest shareholder, with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 8.0% of the stock. Furthermore, CEO James Nesci is the owner of 1.0% of the company's shares.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Blue Foundry 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.

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.

We can see that insiders own shares in Blue Foundry Bancorp. In their own names, insiders own US$8.7m worth of stock in the US$185m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Blue Foundry Bancorp. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Blue Foundry Bancorp better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Blue Foundry Bancorp (including 1 which is a bit concerning) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.