Key Insights

• Significantly high institutional ownership implies Stellar Bancorp's stock price is sensitive to their trading actions

• The top 25 shareholders own 50% of the company

• Recent sales by insiders

To get a sense of who is truly in control of Stellar Bancorp, Inc. (NYSE:STEL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 52% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would appreciate the 5.1% increase in share prices last week, given their one-year returns have been disappointing at 28%.

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

View our latest analysis for Stellar Bancorp

What Does The Institutional Ownership Tell Us About Stellar Bancorp?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Stellar Bancorp. Our data shows that BlackRock, Inc. is the largest shareholder with 14% of shares outstanding. With 5.7% and 3.6% of the shares outstanding respectively, The Vanguard Group, Inc. and Dimensional Fund Advisors LP are the second and third largest shareholders. In addition, we found that Robert Franklin, the CEO has 0.7% of the shares allocated to their name.

After doing some more digging, we found that the top 25 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.