Institutional investors are Byline Bancorp, Inc.'s (NYSE:BY) biggest bettors and were rewarded after last week's US$57m market cap gain

Key Insights

• Institutions' substantial holdings in Byline Bancorp implies that they have significant influence over the company's share price
• The top 5 shareholders own 52% of the company
• Recent sales by insiders

If you want to know who really controls Byline Bancorp, Inc. (NYSE:BY), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 4.4% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 37% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Byline Bancorp.

View our latest analysis for Byline Bancorp

What Does The Institutional Ownership Tell Us About Byline 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.

We can see that Byline Bancorp 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. 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 Byline Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Byline Bancorp. Looking at our data, we can see that the largest shareholder is Antonio Del Valle Perochena with 27% of shares outstanding. For context, the second largest shareholder holds about 9.7% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder. In addition, we found that Roberto Herencia, the CEO has 0.8% of the shares allocated to their name.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Byline Bancorp

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders maintain a significant holding in Byline Bancorp, Inc.. It has a market capitalization of just US$1.3b, and insiders have US$434m worth of shares in their own names. That's quite significant. 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, who are usually individual investors, hold a 13% stake in Byline Bancorp. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 9.8%, of the Byline Bancorp stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Byline Bancorp better, we need to consider many other factors. For example, we've discovered 1 warning sign for Byline Bancorp that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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.