Key Insights

• Given the large stake in the stock by institutions, Plumas Bancorp's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 23 shareholders

If you want to know who really controls Plumas Bancorp (NASDAQ:PLBC), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained US$69m in market cap last week. The one-year return on investment is currently 39% and last week's gain would have been more than welcomed.

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

What Does The Institutional Ownership Tell Us About Plumas Bancorp?

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.

Plumas Bancorp already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Plumas Bancorp's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Plumas Bancorp. Our data shows that FMR LLC is the largest shareholder with 8.9% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.3% and 4.8% of the stock. Furthermore, CEO Andrew Ryback is the owner of 1.5% of the company's shares.

A closer look at our ownership figures suggests that the top 23 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Plumas Bancorp

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 see that insiders own shares in Plumas Bancorp. In their own names, insiders own US$23m worth of stock in the US$329m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Plumas Bancorp. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 3.5%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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.