Institutional investors in Western Alliance Bancorporation (NYSE:WAL) see US$299m decrease in market cap last week, although long-term gains have benefitted them.
Key Insights
Given the large stake in the stock by institutions, Western Alliance Bancorporation's stock price might be vulnerable to their trading decisions
A total of 17 investors have a majority stake in the company with 51% ownership
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls Western Alliance Bancorporation (NYSE:WAL), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 80% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors endured the highest losses after the company's market cap fell by US$299m last week. However, the 85% one-year return to shareholders may have helped lessen their pain. We would assume however, that they would be on the lookout for weakness in the future.
Let's take a closer look to see what the different types of shareholders can tell us about Western Alliance Bancorporation.
View our latest analysis for Western Alliance Bancorporation
What Does The Institutional Ownership Tell Us About Western Alliance Bancorporation?
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 Western Alliance Bancorporation 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. 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 Western Alliance Bancorporation's 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. Western Alliance Bancorporation is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 9.2% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 5.8% of common stock, and BlackRock, Inc. holds about 5.0% of the company stock.
A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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 Western Alliance Bancorporation
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Western Alliance Bancorporation. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$325m worth of shares (at current prices). 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 14% stake in the company, and hence can't easily be ignored. 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. To that end, you should be aware of the 2 warning signs we've spotted with Western Alliance Bancorporation .
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.
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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.
