Institutional investors own a significant stake of 26% in Central Valley Community Bancorp (NASDAQ:CWBC)

Key Insights

• Significantly high institutional ownership implies Central Valley Community Bancorp's stock price is sensitive to their trading actions
• A total of 14 investors have a majority stake in the company with 51% ownership
• Insiders own 10% of Central Valley Community Bancorp

A look at the shareholders of Central Valley Community Bancorp (NASDAQ:CWBC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 26% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's delve deeper into each type of owner of Central Valley Community Bancorp, beginning with the chart below.

View our latest analysis for Central Valley Community Bancorp

What Does The Institutional Ownership Tell Us About Central Valley Community Bancorp?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Central Valley Community Bancorp does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Central Valley Community Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 6.1% of Central Valley Community Bancorp. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Fourthstone LLC is currently the company's largest shareholder with 9.7% of shares outstanding. With 5.2% and 4.9% of the shares outstanding respectively, Louis McMurray and BlackRock, Inc. are the second and third largest shareholders.

After doing some more digging, we found that the top 14 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Central Valley Community Bancorp

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.

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 Central Valley Community Bancorp. Insiders own US$37m worth of shares in the US$353m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

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

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.