Individual investors who have a significant stake must be disappointed along with institutions after Carter Bankshares, Inc.'s (NASDAQ:CARE) market cap dropped by US$42m

By
Simply Wall St
Published
December 01, 2021
NasdaqGS:CARE
Source: Shutterstock

A look at the shareholders of Carter Bankshares, Inc. (NASDAQ:CARE) can tell us which group is most powerful. With 58% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 10% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 37% stock also took a hit.

Let's delve deeper into each type of owner of Carter Bankshares, beginning with the chart below.

View our latest analysis for Carter Bankshares

ownership-breakdown
NasdaqGS:CARE Ownership Breakdown December 2nd 2021

What Does The Institutional Ownership Tell Us About Carter Bankshares?

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.

Carter Bankshares 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. 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 Carter Bankshares, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:CARE Earnings and Revenue Growth December 2nd 2021

Hedge funds don't have many shares in Carter Bankshares. Our data shows that BlackRock, Inc. is the largest shareholder with 6.8% of shares outstanding. With 5.7% and 4.7% of the shares outstanding respectively, AllianceBernstein L.P. and The Vanguard Group, Inc. are the second and third largest shareholders.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Carter Bankshares

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Carter Bankshares, Inc.. As individuals, the insiders collectively own US$17m worth of the US$384m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Carter Bankshares shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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