What You Need To Know About Westamerica Bancorporation's (NASDAQ:WABC) Investor Composition

By
Simply Wall St
Published
March 15, 2022
NasdaqGS:WABC
Source: Shutterstock

Every investor in Westamerica Bancorporation (NASDAQ:WABC) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

Westamerica Bancorporation has a market capitalization of US$1.7b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Westamerica Bancorporation.

Check out our latest analysis for Westamerica Bancorporation

ownership-breakdown
NasdaqGS:WABC Ownership Breakdown March 15th 2022

What Does The Institutional Ownership Tell Us About Westamerica Bancorporation?

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 Westamerica Bancorporation does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Westamerica Bancorporation, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:WABC Earnings and Revenue Growth March 15th 2022

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 Westamerica Bancorporation. Our data shows that BlackRock, Inc. is the largest shareholder with 15% of shares outstanding. T. Rowe Price Group, Inc. is the second largest shareholder owning 14% of common stock, and The Vanguard Group, Inc. holds about 12% of the company stock. Additionally, the company's CEO David Payne directly holds 3.3% of the total shares outstanding.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Westamerica Bancorporation

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Westamerica Bancorporation. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$66m worth of shares (at current prices). 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 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Westamerica Bancorporation. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Westamerica Bancorporation has 1 warning sign we think 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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