The considerable ownership by retail investors in Oak Valley Bancorp indicates that they collectively have a greater say in management and business strategy
Every investor in Oak Valley Bancorp (NASDAQ:OVLY) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 32% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of Oak Valley Bancorp.
NasdaqCM:OVLY Ownership Breakdown September 27th 2024
What Does The Institutional Ownership Tell Us About Oak Valley Bancorp?
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.
We can see that Oak Valley Bancorp does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Oak Valley Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqCM:OVLY Earnings and Revenue Growth September 27th 2024
Hedge funds don't have many shares in Oak Valley Bancorp. The company's largest shareholder is BlackRock, Inc., with ownership of 5.3%. For context, the second largest shareholder holds about 4.6% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. Additionally, the company's CEO Christopher Courtney directly holds 2.7% 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.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Oak Valley 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.
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 information suggests that insiders maintain a significant holding in Oak Valley Bancorp. Insiders own US$38m worth of shares in the US$222m 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 50% of Oak Valley Bancorp. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Oak Valley Bancorp better, we need to consider many other factors.
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.
