Painful week for individual investors invested in Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) after 16% drop, institutions also suffered losses

Key Insights

• Significant control over Eagle Bancorp Montana by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 36% of the company
• Insiders have sold recently

Every investor in Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 37% came under pressure after market cap dropped to US$127m last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Eagle Bancorp Montana.

Check out our latest analysis for Eagle Bancorp Montana

What Does The Institutional Ownership Tell Us About Eagle Bancorp Montana?

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 Eagle Bancorp Montana does have institutional investors; and they hold a good portion of the company's 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Eagle Bancorp Montana's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Eagle Bancorp Montana. Manulife Asset Management is currently the company's largest shareholder with 4.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.5% and 2.9% of the stock.

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.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Eagle Bancorp Montana

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.

We can see that insiders own shares in Eagle Bancorp Montana, Inc.. It has a market capitalization of just US$127m, and insiders have US$7.8m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 57% of Eagle Bancorp Montana. 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:

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. Case in point: We've spotted 2 warning signs for Eagle Bancorp Montana 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.

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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.