To get a sense of who is truly in control of CF Bankshares Inc. (NASDAQ:CFBK), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 35% 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).
Private equity firms, on the other hand, account for 26% of the company's stockholders.
In the chart below, we zoom in on the different ownership groups of CF Bankshares.
NasdaqCM:CFBK Ownership Breakdown November 11th 2023
What Does The Institutional Ownership Tell Us About CF Bankshares?
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 CF Bankshares. 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. 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 CF Bankshares, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqCM:CFBK Earnings and Revenue Growth November 11th 2023
We note that hedge funds don't have a meaningful investment in CF Bankshares. Castle Creek Advisors VIII LLC is currently the company's largest shareholder with 26% of shares outstanding. AllianceBernstein L.P. is the second largest shareholder owning 8.0% of common stock, and Edward Cochran holds about 5.3% of the company stock. Edward Cochran, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Timothy O’Dell, the CEO has 4.4% of the shares allocated to their name.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 CF Bankshares
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of CF Bankshares Inc.. Insiders own US$15m worth of shares in the US$106m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 35% stake in CF Bankshares. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 26%, private equity firms could influence the CF Bankshares board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand CF Bankshares 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.
