Key Insights

• The considerable ownership by individual investors in MetroCity Bankshares indicates that they collectively have a greater say in management and business strategy

• 45% of the business is held by the top 25 shareholders

• Insiders have been buying lately

If you want to know who really controls MetroCity Bankshares, Inc. (NASDAQ:MCBS), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 53% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual insiders, on the other hand, account for 29% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of MetroCity Bankshares.

See our latest analysis for MetroCity Bankshares

What Does The Institutional Ownership Tell Us About MetroCity 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 MetroCity 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 MetroCity Bankshares, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in MetroCity Bankshares. With a 5.5% stake, CEO Nack Paek is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 4.8% and 4.3%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Don T. Leung is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

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.