- United States
In the wake of First Busey Corporation's (NASDAQ:BUSE) latest US$96m market cap drop, institutional owners may be forced to take severe actions
- Significantly high institutional ownership implies First Busey's stock price is sensitive to their trading actions
- The top 25 shareholders own 45% of the company
- Insiders have been selling lately
To get a sense of who is truly in control of First Busey Corporation (NASDAQ:BUSE), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$1.1b last week after a 7.7% drop in the share price. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 19% for shareholders. Often called “market makers”, institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell First Busey, which might have negative implications on individual investors.
Let's delve deeper into each type of owner of First Busey, beginning with the chart below.
See our latest analysis for First Busey
What Does The Institutional Ownership Tell Us About First Busey?
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.
As you can see, institutional investors have a fair amount of stake in First Busey. 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. 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 First Busey, (below). Of course, keep in mind that there are other factors to consider, too.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in First Busey. The company's largest shareholder is BlackRock, Inc., with ownership of 7.0%. With 5.6% and 5.1% of the shares outstanding respectively, Dimensional Fund Advisors LP and The Vanguard Group, Inc. are the second and third largest shareholders. In addition, we found that Van Dukeman, the CEO has 0.7% of the shares allocated to their name.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of First Busey
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 most recent data indicates that insiders own some shares in First Busey Corporation. The insiders have a meaningful stake worth US$75m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 43% stake in First Busey. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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 First Busey that you should be aware of before investing here.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
First Busey Corporation operates as the bank holding company for Busey Bank that provides retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States.
Flawless balance sheet, undervalued and pays a dividend.