Could WVS Financial Corp.’s (NASDAQ:WVFC) Investor Composition Influence The Stock Price?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

A look at the shareholders of WVS Financial Corp. (NASDAQ:WVFC) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

WVS Financial is not a large company by global standards. It has a market capitalization of US$31m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about WVFC.

View our latest analysis for WVS Financial

NasdaqGM:WVFC Ownership Summary, July 12th 2019
NasdaqGM:WVFC Ownership Summary, July 12th 2019

What Does The Institutional Ownership Tell Us About WVS Financial?

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 own 19% of WVS Financial. 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 WVS Financial’s earnings history, below. Of course, the future is what really matters.

NasdaqGM:WVFC Income Statement, July 12th 2019
NasdaqGM:WVFC Income Statement, July 12th 2019

Our data indicates that hedge funds own 6.1% of WVS Financial. That’s interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of WVS Financial

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.

It seems insiders own a significant proportion of WVS Financial Corp.. Insiders own US$4.6m worth of shares in the US$31m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 50% stake in WVFC, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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.

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 check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.