Individual investors who have a significant stake must be disappointed along with institutions after Guaranty Bancshares, Inc.'s (NYSE:GNTY) market cap dropped by US$44m

Key Insights

• The considerable ownership by individual investors in Guaranty Bancshares indicates that they collectively have a greater say in management and business strategy
• 46% of the business is held by the top 25 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Guaranty Bancshares, Inc. (NYSE:GNTY), 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 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 26% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Guaranty Bancshares.

See our latest analysis for Guaranty Bancshares

What Does The Institutional Ownership Tell Us About Guaranty 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.

Guaranty Bancshares already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Guaranty Bancshares' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Guaranty Bancshares. Our data shows that Richard Baker is the largest shareholder with 5.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.2% and 5.0% of the stock. Additionally, the company's CEO Tyson Abston directly holds 1.0% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 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 Guaranty Bancshares

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of Guaranty Bancshares, Inc.. Insiders own US$76m worth of shares in the US$369m 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-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guaranty Bancshares better, we need to consider many other factors. Be aware that Guaranty Bancshares is showing 2 warning signs in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com