Hingham Institution for Savings' (NASDAQ:HIFS) market cap dropped US$65m last week; individual investors who hold 32% were hit as were institutions

By
Simply Wall St
Published
January 21, 2022
NasdaqGM:HIFS
Source: Shutterstock

A look at the shareholders of Hingham Institution for Savings (NASDAQ:HIFS) can tell us which group is most powerful. The group holding the most number of shares in the company, around 32% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 7.5% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 31% stock also took a hit.

Let's delve deeper into each type of owner of Hingham Institution for Savings, beginning with the chart below.

Check out our latest analysis for Hingham Institution for Savings

ownership-breakdown
NasdaqGM:HIFS Ownership Breakdown January 21st 2022

What Does The Institutional Ownership Tell Us About Hingham Institution for Savings?

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.

We can see that Hingham Institution for Savings does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Hingham Institution for Savings' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGM:HIFS Earnings and Revenue Growth January 21st 2022

It looks like hedge funds own 7.5% of Hingham Institution for Savings shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Port Capital LLC is currently the company's largest shareholder with 7.5% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 4.9% of common stock, and Ballina 2012 Irrevocable Trust holds about 4.6% of the company stock. Additionally, the company's CEO Robert Gaughen directly holds 2.1% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 51% implying that 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hingham Institution for Savings

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.

Our most recent data indicates that insiders own a reasonable proportion of Hingham Institution for Savings. Insiders own US$142m worth of shares in the US$799m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Hingham Institution for Savings. 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.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hingham Institution for Savings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Hingham Institution for Savings that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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