With 64% ownership of the shares, Commerce Bancshares, Inc. (NASDAQ:CBSH) is heavily dominated by institutional owners

Commerce Bancshares, Inc. -0.68%

Commerce Bancshares, Inc.

CBSH

51.41

-0.68%

Key Insights

  • Significantly high institutional ownership implies Commerce Bancshares' stock price is sensitive to their trading actions
  • A total of 10 investors have a majority stake in the company with 50% ownership
  • Recent sales by insiders

To get a sense of who is truly in control of Commerce Bancshares, Inc. (NASDAQ:CBSH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's delve deeper into each type of owner of Commerce Bancshares, beginning with the chart below.

See our latest analysis for Commerce Bancshares

ownership-breakdown
NasdaqGS:CBSH Ownership Breakdown December 30th 2023

What Does The Institutional Ownership Tell Us About Commerce Bancshares?

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 Commerce Bancshares. 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 Commerce Bancshares, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:CBSH Earnings and Revenue Growth December 30th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 7.2% of Commerce Bancshares shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The Vanguard Group, Inc. is currently the largest shareholder, with 9.5% of shares outstanding. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 7.2% by the third-largest shareholder.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of Commerce Bancshares

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Shareholders would probably be interested to learn that insiders own shares in Commerce Bancshares, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$207m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Commerce Bancshares. 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

It seems that Private Companies own 5.9%, of the Commerce Bancshares stock. 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. For example, we've discovered 2 warning signs for Commerce Bancshares (1 is a bit concerning!) that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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