- United States
Southern States Bancshares, Inc.'s (NASDAQ:SSBK) market cap dropped US$33m last week; Individual investors bore the brunt
- Significant control over Southern States Bancshares by individual investors implies that the general public has more power to influence management and governance-related decisions
- The top 8 shareholders own 53% of the company
- Insiders have sold recently
To get a sense of who is truly in control of Southern States Bancshares, Inc. (NASDAQ:SSBK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 29% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to US$205m last week, individual investors would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of Southern States Bancshares.
See our latest analysis for Southern States Bancshares
What Does The Institutional Ownership Tell Us About Southern States 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.
As you can see, institutional investors have a fair amount of stake in Southern States Bancshares. 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 Southern States Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 26% of Southern States Bancshares 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. Strategic Value Bank Partners LLC is currently the company's largest shareholder with 9.7% of shares outstanding. For context, the second largest shareholder holds about 9.2% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder. Additionally, the company's CEO Stephen Whatley directly holds 6.2% of the total shares outstanding.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Southern States Bancshares
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.
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 most recent data indicates that insiders own a reasonable proportion of Southern States Bancshares, Inc.. Insiders have a US$41m stake in this US$205m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Southern States Bancshares. 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
With an ownership of 5.8%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
It's always worth thinking about the different groups who own shares in a company. But to understand Southern States Bancshares better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Southern States Bancshares (of which 1 doesn't sit too well with us!) you should know about.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
Valuation is complex, but we're helping make it simple.
Find out whether Southern States Bancshares is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Southern States Bancshares
Southern States Bancshares, Inc. operates as the bank holding company for Southern States Bank that provides community banking services to businesses and individuals.
Flawless balance sheet with solid track record.