Institutions profited after NB Bancorp, Inc.'s (NASDAQ:NBBK) market cap rose US$54m last week but individual investors profited the most

Simply Wall St · 10/17 16:10

Key Insights

  • The considerable ownership by individual investors in NB Bancorp indicates that they collectively have a greater say in management and business strategy
  • The top 25 shareholders own 43% of the company
  • Recent purchases by insiders

A look at the shareholders of NB Bancorp, Inc. (NASDAQ:NBBK) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 7.1% increase in the stock price last week, individual investors profited the most, but institutions who own 43% stock also stood to gain from the increase.

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

Check out our latest analysis for NB Bancorp

ownership-breakdown
NasdaqCM:NBBK Ownership Breakdown October 17th 2024

What Does The Institutional Ownership Tell Us About NB 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.

NB Bancorp already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 NB Bancorp, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqCM:NBBK Earnings and Revenue Growth October 17th 2024

It would appear that 5.5% of NB Bancorp shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Needham Bank Employee Stock Ownership Plan is the largest shareholder with 8.0% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.3% and 5.5%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of NB Bancorp

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. 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.

Shareholders would probably be interested to learn that insiders own shares in NB Bancorp, Inc.. As individuals, the insiders collectively own US$15m worth of the US$808m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 50% stake in NB Bancorp. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For example, we've discovered 1 warning sign for NB Bancorp that you should be aware of before investing here.

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.