Key Insights

• Significantly high institutional ownership implies Shore Bancshares' stock price is sensitive to their trading actions

• The top 11 shareholders own 51% of the company

• Insiders have been buying lately

To get a sense of who is truly in control of Shore Bancshares, Inc. (NASDAQ:SHBI), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 46% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of Shore Bancshares.

Check out our latest analysis for Shore Bancshares

What Does The Institutional Ownership Tell Us About Shore Bancshares?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Shore Bancshares. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shore Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 15% of Shore Bancshares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Alan Hyatt is currently the largest shareholder, with 8.9% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.7% and 7.7%, of the shares outstanding, respectively. Additionally, the company's CEO Lloyd Beatty directly holds 0.6% of the total shares outstanding.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 is some analyst coverage of the stock, but it could still become more well known, with time.