What Kind Of Shareholders Own Bank of South Carolina Corporation (NASDAQ:BKSC)?

A look at the shareholders of Bank of South Carolina Corporation (NASDAQ:BKSC) can tell us which group is most powerful. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

Bank of South Carolina is not a large company by global standards. It has a market capitalization of US$104m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Bank of South Carolina.

View 1 warning sign we detected for Bank of South Carolina

NasdaqCM:BKSC Ownership Summary, January 11th 2020
NasdaqCM:BKSC Ownership Summary, January 11th 2020

What Does The Institutional Ownership Tell Us About Bank of South Carolina?

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 Bank of South Carolina does have institutional investors; and they hold 8.2% of the stock. 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 Bank of South Carolina, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqCM:BKSC Income Statement, January 11th 2020
NasdaqCM:BKSC Income Statement, January 11th 2020

Hedge funds don’t have many shares in Bank of South Carolina. Looking at our data, we can see that the largest shareholder is Hugh Lane with 5.7% of shares outstanding. The second largest shareholder with 4.3%, is The Bank of South Carolina Corporation, ESOP, followed by Charles Lane, with an ownership of 3.8%.

Our studies suggest that the top 22 shareholders collectively control less than 50% of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.

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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Bank of South Carolina

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. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.

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.

Our information suggests that insiders maintain a significant holding in Bank of South Carolina Corporation. Insiders have a US$22m stake in this US$104m business. 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 — mostly retail investors — own 66% of Bank of South Carolina. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

For example, we’ve discovered 1 warning sign for Bank of South Carolina which any shareholder or potential investor should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

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