- United States
Painful week for individual investors invested in Malvern Bancorp, Inc. (NASDAQ:MLVF) after 11% drop, institutions also suffered losses
- The considerable ownership by individual investors in Malvern Bancorp indicates that they collectively have a greater say in management and business strategy
- The top 16 shareholders own 51% of the company
- Recent purchases by insiders
If you want to know who really controls Malvern Bancorp, Inc. (NASDAQ:MLVF), then you'll have to look at the makeup of its share registry. With 43% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions, who own 30% shares weren’t spared from last week’s US$14m market cap drop, individual investors as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Malvern Bancorp.
Check out our latest analysis for Malvern Bancorp
What Does The Institutional Ownership Tell Us About Malvern Bancorp?
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 Malvern Bancorp. 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 Malvern Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 16% of Malvern Bancorp shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is PL Capital Advisors, LLC, with ownership of 9.9%. In comparison, the second and third largest shareholders hold about 9.1% and 5.9% of the stock. Furthermore, CEO Anthony Weagley is the owner of 1.2% of the company's shares.
After doing some more digging, we found that the top 16 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Malvern Bancorp
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can see that insiders own shares in Malvern Bancorp, Inc.. In their own names, insiders own US$7.0m worth of stock in the US$122m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. 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 Equity Ownership
Private equity firms hold a 5.7% stake in Malvern Bancorp. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Malvern Bancorp .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.
Malvern Bancorp, Inc. operates as the bank holding company for Malvern Bank that engages in the provision of various banking products and services to consumer and business customers in Pennsylvania.
Flawless balance sheet with questionable track record.