The big shareholder groups in Capstar Financial Holdings, Inc. (NASDAQ:CSTR) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Capstar Financial Holdings is not a large company by global standards. It has a market capitalization of US$312m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Capstar Financial Holdings.
View our latest analysis for Capstar Financial Holdings
What Does The Institutional Ownership Tell Us About Capstar Financial Holdings?
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 Capstar Financial Holdings 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 Capstar Financial Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Capstar Financial Holdings. BlackRock, Inc. is currently the company's largest shareholder with 5.4% of shares outstanding. With 5.3% and 3.4% of the shares outstanding respectively, Gaylon Lawrence and The Vanguard Group, Inc. are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.