Institutions along with retail investors who hold considerable shares inHawthorn Bancshares, Inc. (NASDAQ:HWBK) come under pressure; lose 16% of holdings value

Key Insights

• The considerable ownership by retail investors in Hawthorn Bancshares indicates that they collectively have a greater say in management and business strategy
• 42% of the business is held by the top 25 shareholders
• Insider ownership in Hawthorn Bancshares is 17%

To get a sense of who is truly in control of Hawthorn Bancshares, Inc. (NASDAQ:HWBK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 16% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 27% stock also took a hit.

Let's delve deeper into each type of owner of Hawthorn Bancshares, beginning with the chart below.

View our latest analysis for Hawthorn Bancshares

What Does The Institutional Ownership Tell Us About Hawthorn Bancshares?

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.

We can see that Hawthorn Bancshares does have institutional investors; and they hold a good portion of the company's stock. 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 Hawthorn Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.

Hawthorn Bancshares is not owned by hedge funds. The company's largest shareholder is Douglas Eden, with ownership of 9.8%. With 4.9% and 4.8% of the shares outstanding respectively, Ategra Capital Management, LLC and FJ Capital Management, LLC are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hawthorn Bancshares

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Hawthorn Bancshares, Inc.. Insiders have a US$33m stake in this US$196m business. 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 substantial 55% stake in Hawthorn Bancshares, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. For instance, we've identified 1 warning sign for Hawthorn Bancshares 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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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.