Capital Bancorp, Inc. (NASDAQ:CBNK) boasts of bullish insider sentiment with 36% ownership and they have been buying lately

editorial-team@simplywallst.com (Simply Wall St)

Sat, Nov 25, 2023, 5:30 AM 4 min read

To get a sense of who is truly in control of Capital Bancorp, Inc. (NASDAQ:CBNK), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 36% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

A quick look at our data suggests that insiders have been buying shares in the company recently. This might indicate that they expect share prices to rise in the near future.

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

Check out our latest analysis for Capital Bancorp

ownership-breakdown — NasdaqGS:CBNK Ownership Breakdown November 25th 2023

What Does The Institutional Ownership Tell Us About Capital Bancorp?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Capital Bancorp does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Capital Bancorp, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — NasdaqGS:CBNK Earnings and Revenue Growth November 25th 2023

Capital Bancorp is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Randall Levitt with 8.7% of shares outstanding. For context, the second largest shareholder holds about 6.8% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder. Joshua Bernstein, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Edward Barry directly holds 2.4% of the total shares outstanding.

After doing some more digging, we found that the top 13 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. 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 Capital Bancorp

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.

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.

It seems insiders own a significant proportion of Capital Bancorp, Inc.. Insiders have a US$102m stake in this US$284m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Capital 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.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.