Do Insiders Own Lots Of Shares In Southern Missouri Bancorp, Inc. (NASDAQ:SMBC)?

If you want to know who really controls Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), then you’ll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Southern Missouri Bancorp is a smaller company with a market capitalization of US$319m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Southern Missouri Bancorp.

See our latest analysis for Southern Missouri Bancorp

NasdaqGM:SMBC Ownership Summary, March 3rd 2020
NasdaqGM:SMBC Ownership Summary, March 3rd 2020

What Does The Institutional Ownership Tell Us About Southern Missouri 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.

We can see that Southern Missouri Bancorp does have institutional investors; and they hold 41% of the 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Southern Missouri Bancorp’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

NasdaqGM:SMBC Income Statement, March 3rd 2020
NasdaqGM:SMBC Income Statement, March 3rd 2020

It looks like hedge funds own 14% of Southern Missouri Bancorp shares. That’s interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. FJ Capital Management, LLC is currently the largest shareholder, with 7.1% of shares outstanding. With 6.5% and 5.8% of the shares outstanding respectively, Jacobs Asset Management, LLC and Todd Hensley are the second and third largest shareholders. Todd Hensley also happens to hold the title of Member of the Board of Directors.

Additionally, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no one share holder 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. 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 Southern Missouri 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. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Southern Missouri Bancorp, Inc.. It has a market capitalization of just US$319m, and insiders have US$53m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public holds a 29% stake in SMBC. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks, for example – Southern Missouri Bancorp has 1 warning sign we think you should be aware of.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.