Institutional owners may ignore Stock Yards Bancorp, Inc.'s (NASDAQ:SYBT) recent US$181m market cap decline as longer-term profits stay in the green

Key Insights

• Given the large stake in the stock by institutions, Stock Yards Bancorp's stock price might be vulnerable to their trading decisions
• The top 25 shareholders own 50% of the company
• Insiders have been selling lately

If you want to know who really controls Stock Yards Bancorp, Inc. (NASDAQ:SYBT), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 60% 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.

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 7.9% in value last week. However, the 45% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.

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

View our latest analysis for Stock Yards Bancorp

What Does The Institutional Ownership Tell Us About Stock Yards Bancorp?

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.

As you can see, institutional investors have a fair amount of stake in Stock Yards 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. 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 Stock Yards Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Stock Yards Bancorp. The company's largest shareholder is BlackRock, Inc., with ownership of 6.9%. With 6.3% and 4.2% of the shares outstanding respectively, The Vanguard Group, Inc. and Neuberger Berman Investment Advisers 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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Stock Yards Bancorp

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Stock Yards Bancorp, Inc.. The insiders have a meaningful stake worth US$53m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Stock Yards Bancorp. 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. Case in point: We've spotted 1 warning sign for Stock Yards Bancorp you should be aware of.

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.

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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.