With 45% ownership in First Mid Bancshares, Inc. (NASDAQ:FMBH), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies First Mid Bancshares' stock price is sensitive to their trading actions
• A total of 25 investors have a majority stake in the company with 47% ownership
• Insiders have bought recently

Every investor in First Mid Bancshares, Inc. (NASDAQ:FMBH) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And as as result, institutional investors reaped the most rewards after the company's stock price gained 6.1% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 16%.

In the chart below, we zoom in on the different ownership groups of First Mid Bancshares.

See our latest analysis for First Mid Bancshares

What Does The Institutional Ownership Tell Us About First Mid Bancshares?

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.

As you can see, institutional investors have a fair amount of stake in First Mid Bancshares. 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 First Mid Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in First Mid Bancshares. The company's largest shareholder is BlackRock, Inc., with ownership of 8.0%. In comparison, the second and third largest shareholders hold about 5.3% and 5.3% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of First Mid Bancshares

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 most recent data indicates that insiders own a reasonable proportion of First Mid Bancshares, Inc.. It has a market capitalization of just US$870m, and insiders have US$120m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in First Mid Bancshares. 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 First Mid Bancshares better, we need to consider many other factors. Take risks for example - First Mid Bancshares has 1 warning sign we think you should be aware of.

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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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.