Key Insights
- Institutions’ substantial holdings in Enterprise Financial Services implies that they have significant influence over the company’s share price
- 50% of the business is held by the top 17 shareholders
- Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Enterprise Financial Services Corp (NASDAQ:EFSC), 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 72% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Last week’s US$71m market cap gain would probably be appreciated by institutional investors, especially after a year of 4.8% losses.
In the chart below, we zoom in on the different ownership groups of Enterprise Financial Services.
View our latest analysis for Enterprise Financial Services
What Does The Institutional Ownership Tell Us About Enterprise Financial Services?
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.
As you can see, institutional investors have a fair amount of stake in Enterprise Financial Services. 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. 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 Enterprise Financial Services’ earnings history below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Enterprise Financial Services is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 9.3% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.7% and 5.4%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Enterprise Financial Services
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 some shares in Enterprise Financial Services Corp. The insiders have a meaningful stake worth US$73m. 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
The general public– including retail investors — own 23% 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Enterprise Financial Services 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.
Valuation is complex, but we’re helping make it simple.
Find out whether Enterprise Financial Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
