Institutional Investors Are Community Financial System, Inc.'s (NYSE:CBU) Biggest Bettors and Were Rewarded After Last Week's US$416m Market Cap Gain

Key Insights

Institutions' substantial holdings in Community Financial System implies that they have significant influence over the company's share price
The top 8 shareholders own 50% of the company
Insiders have been buying lately

If you want to know who really controls Community Financial System, Inc. (NYSE:CBU), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 72% 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$416m in market cap last week. The one-year return on investment is currently 74% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Community Financial System, beginning with the chart below.

big — NYSE:CBU Ownership Breakdown November 9th 2024

What Does The Institutional Ownership Tell Us About Community Financial System?

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.

We can see that Community Financial System does have institutional investors; and they hold a good portion of the company's stock. 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 Community Financial System, (below). Of course, keep in mind that there are other factors to consider, too.

big — NYSE:CBU Earnings and Revenue Growth November 9th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Community Financial System is not owned by hedge funds. The company's largest shareholder is BlackRock, Inc., with ownership of 14%. In comparison, the second and third largest shareholders hold about 12% and 6.9% of the stock.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Community Financial System

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Community Financial System, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$44m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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