This is what the shareholding structure of MainStreet Bancshares, Inc. looks like (NASDAQ: MNSB)


Every investor in MainStreet Bancshares, Inc. (NASDAQ: MNSB) should know about the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

MainStreet Bancshares is not a large corporation by global standards. It has a market cap of US $ 175 million, which means it wouldn’t get the attention of many institutional investors. Our analysis of company ownership, below, shows that institutions are visible on the share register. We can zoom in on the different property groups to find out more about MainStreet Bancshares.

NasdaqCM: Distribution of MNSB ownership on December 25, 2021

What does institutional ownership tell us about MainStreet Bancshares?

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 businesses to have some institutions listed, especially if they are growing.

MainStreet Bancshares already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out MainStreet Bancshares earnings history below. Of course, the future is what really matters.

profit and revenue growthNasdaqCM: MNSB Earnings and Revenue Growth December 25, 2021

It appears that 7.6% of MainStreet Bancshares shares are controlled by hedge funds. This is worth noting, as hedge funds are often quite active investors who can try to influence management. Many want to see value creation (and a higher share price) in the short to medium term. The major shareholder of the company is Banc Funds Company, LLC, with an 8.6% stake. With 7.6% and 4.6% of shares outstanding respectively, EJF Capital LLC and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, we found that Jeff Dick, the CEO, has 2.3% of the shares attributed to their name.

Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, which means that the company’s shares are widely disseminated and there is no dominant shareholder.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same result can be obtained by studying the feelings of analysts. There is a little analyst coverage of the stock, but not a lot. There is therefore room for it to acquire more cover.

MainStreet Bancshares Insider Property

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares of MainStreet Bancshares, Inc. As individuals, insiders collectively own US $ 13 million of the company US $ 175 million. Some would say this shows the alignment of interests between shareholders and the board, although we generally prefer to see larger insider stakes. But it might be worth checking out if those insiders have sold.

General public property

With a 50% stake, the general public, made up mainly of individual investors, has some influence over MainStreet Bancshares. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.

Private shareholders

With an 8.6% stake, private equity firms could influence the board of directors of MainStreet Bancshares. Some might like this, as sometimes private capital is activists holding management to account. But other times, the private equity sells, after you have taken the company to the stock market.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to better understand MainStreet Bancshares, there are many other factors that we need to take into account. To this end, you need to know the 1 warning sign we spotted with MainStreet Bancshares.

Ultimately the future is the most important. You can access this free analyst forecast report for the company.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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