What Kind Of Investors Own Most Of First Business Financial Services, Inc. (NASDAQ:FBIZ)?

By
Simply Wall St
Published
May 19, 2021
NasdaqGS:FBIZ
Source: Shutterstock

Every investor in First Business Financial Services, Inc. (NASDAQ:FBIZ) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

First Business Financial Services is not a large company by global standards. It has a market capitalization of US$237m, 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 institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about First Business Financial Services.

See our latest analysis for First Business Financial Services

ownership-breakdown
NasdaqGS:FBIZ Ownership Breakdown May 20th 2021

What Does The Institutional Ownership Tell Us About First Business Financial Services?

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 Business Financial Services. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Business Financial Services, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:FBIZ Earnings and Revenue Growth May 20th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in First Business Financial Services. Our data shows that Banc Funds Company, L.L.C. is the largest shareholder with 9.0% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 6.5% of common stock, and Dimensional Fund Advisors L.P. holds about 5.2% of the company stock. Furthermore, CEO Corey Chambas is the owner of 1.7% of the company's shares.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 First Business Financial Services

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I can report that insiders do own shares in First Business Financial Services, Inc.. It has a market capitalization of just US$237m, and insiders have US$14m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public have some degree of sway over First Business Financial Services. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 9.0%, private equity firms could influence the First Business Financial Services board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand First Business Financial Services better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for First Business Financial Services you should know about.

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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