Despite recent sales, HBT Financial, Inc. (NASDAQ:HBT) insiders own 60% shares but recent downturn may have set them back

Key Insights

• Significant insider control over HBT Financial implies vested interests in company growth
• The largest shareholder of the company is Fred Drake with a 55% stake
• Insiders have sold recently

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A look at the shareholders of HBT Financial, Inc. (NASDAQ:HBT) can tell us which group is most powerful. With 60% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Despite selling some shares recently, insiders control a good portion of the company's stock. As a result, the group bore the brunt of last week’s US$56m market cap loss.

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

Check out our latest analysis for HBT Financial

What Does The Institutional Ownership Tell Us About HBT Financial?

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.

As you can see, institutional investors have a fair amount of stake in HBT Financial. 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 HBT Financial's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in HBT Financial. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In HBT Financial's case, its Top Key Executive, Fred Drake, is the largest shareholder, holding 55% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.0% and 3.1% of the stock. Interestingly, the third-largest shareholder, Roger Baker is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 HBT Financial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own the majority of HBT Financial, Inc.. This means they can collectively make decisions for the company. So they have a US$423m stake in this US$708m business. Most would be pleased to see the board is investing alongside them. You may wish to discover (for free) if they have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HBT Financial. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand HBT Financial better, we need to consider many other factors. For instance, we've identified 1 warning sign for HBT Financial that 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.