With 65% ownership in FS Bancorp, Inc. (NASDAQ:FSBW), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies FS Bancorp's stock price is sensitive to their trading actions
• The top 10 shareholders own 52% of the company
• Insiders own 11% of FS Bancorp

To get a sense of who is truly in control of FS Bancorp, Inc. (NASDAQ:FSBW), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained US$40m in market cap last week. One-year return to shareholders is currently 63% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about FS Bancorp.

View our latest analysis for FS Bancorp

What Does The Institutional Ownership Tell Us About FS 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.

As you can see, institutional investors have a fair amount of stake in FS Bancorp. 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. 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 FS Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. FS Bancorp is not owned by hedge funds. T. Rowe Price Group, Inc. is currently the largest shareholder, with 13% of shares outstanding. With 6.2% and 6.1% of the shares outstanding respectively, BlackRock, Inc. and FS Bancorp, Inc.Employee Stock ownership Plan are the second and third largest shareholders. Additionally, the company's CEO Joseph Adams directly holds 1.9% of the total shares outstanding.

We did some more digging and found that 10 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 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 FS Bancorp

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of FS Bancorp, Inc.. Insiders have a US$37m stake in this US$343m business. 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 18% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand FS Bancorp better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.

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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.