The considerable ownership by individual investors in Arrow Financial indicates that they collectively have a greater say in management and business strategy
A look at the shareholders of Arrow Financial Corporation (NASDAQ:AROW) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 37% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about Arrow Financial.
View our latest analysis for Arrow Financial
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.
Arrow Financial already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Arrow Financial's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Arrow Financial. The company's largest shareholder is Glens Falls National Bank and Trust Company, with ownership of 12%. BlackRock, Inc. is the second largest shareholder owning 7.7% of common stock, and The Vanguard Group, Inc. holds about 5.0% of the company stock.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can report that insiders do own shares in Arrow Financial Corporation. As individuals, the insiders collectively own US$13m worth of the US$474m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Our data indicates that Private Companies hold 12%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
It's always worth thinking about the different groups who own shares in a company. But to understand Arrow Financial 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 would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.