Institutional investors control 74% of Old Second Bancorp, Inc. (NASDAQ:OSBC) and were rewarded last week after stock increased 9.6%

Key Insights

• Given the large stake in the stock by institutions, Old Second Bancorp's stock price might be vulnerable to their trading decisions
• A total of 19 investors have a majority stake in the company with 51% ownership
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

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Every investor in Old Second Bancorp, Inc. (NASDAQ:OSBC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 74% 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 things are looking up for institutional investors after the company gained US$74m in market cap last week. The one-year return on investment is currently 29% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Old Second Bancorp, beginning with the chart below.

View our latest analysis for Old Second Bancorp

What Does The Institutional Ownership Tell Us About Old Second 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 Old Second Bancorp. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Old Second Bancorp's earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Old Second Bancorp. Our data shows that BlackRock, Inc. is the largest shareholder with 7.9% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.0% and 4.6%, of the shares outstanding, respectively. Additionally, the company's CEO James Eccher directly holds 0.8% of the total shares outstanding.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 19 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of Old Second Bancorp

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Old Second Bancorp, Inc.. It has a market capitalization of just US$826m, and insiders have US$31m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Old Second Bancorp. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Old Second Bancorp better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.