What You Need To Know About Eagle Bancorp Montana, Inc.'s (NASDAQ:EBMT) Investor Composition

By
Simply Wall St
Published
June 06, 2021
NasdaqGM:EBMT
Source: Shutterstock

The big shareholder groups in Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Eagle Bancorp Montana is not a large company by global standards. It has a market capitalization of US$168m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Eagle Bancorp Montana.

View our latest analysis for Eagle Bancorp Montana

ownership-breakdown
NasdaqGM:EBMT Ownership Breakdown June 7th 2021

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

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 Eagle Bancorp Montana. 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. 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 Eagle Bancorp Montana's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGM:EBMT Earnings and Revenue Growth June 7th 2021

It would appear that 5.2% of Eagle Bancorp Montana shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that EJF Capital LLC is the largest shareholder with 5.2% of shares outstanding. With 5.0% and 4.8% of the shares outstanding respectively, BlackRock, Inc. and Manulife Asset Management are the second and third largest shareholders. In addition, we found that Peter Johnson, the CEO has 1.3% of the shares allocated to their name.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 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 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own some shares in Eagle Bancorp Montana, Inc.. In their own names, insiders own US$12m worth of stock in the US$168m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 43% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Be aware that Eagle Bancorp Montana is showing 3 warning signs in our investment analysis , and 2 of those are 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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