Insiders were the key beneficiaries as Sterling Bancorp, Inc. (Southfield, MI)'s (NASDAQ:SBT) market cap rises to US$294m

Key Insights

• Insiders appear to have a vested interest in Sterling Bancorp (Southfield MI)'s growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 60% ownership
• Institutions own 19% of Sterling Bancorp (Southfield MI)

To get a sense of who is truly in control of Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 63% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit US$294m market cap following a 13% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Sterling Bancorp (Southfield MI).

View our latest analysis for Sterling Bancorp (Southfield MI)

What Does The Institutional Ownership Tell Us About Sterling Bancorp (Southfield MI)?

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 Sterling Bancorp (Southfield MI) does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Sterling Bancorp (Southfield MI), (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 8.1% of Sterling Bancorp (Southfield MI). That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Erwin Rubenstein with 38% of shares outstanding. With 23% and 8.1% of the shares outstanding respectively, Scott Seligman and FJ Capital Management, LLC are the second and third largest shareholders. Additionally, the company's CEO Thomas O'Brien directly holds 1.1% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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 Sterling Bancorp (Southfield MI)

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Sterling Bancorp, Inc. (Southfield, MI). This gives them effective control of the company. Given it has a market cap of US$294m, that means they have US$186m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 10% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sterling Bancorp (Southfield MI) (of which 1 is concerning!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com