Merchants Bancorp (NASDAQ:MBIN) boasts of bullish insider sentiment with 38% ownership and they have been buying lately

Key Insights

• Significant insider control over Merchants Bancorp implies vested interests in company growth
• The top 9 shareholders own 50% of the company
• Insiders have been buying lately

If you want to know who really controls Merchants Bancorp (NASDAQ:MBIN), 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 individual insiders with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And looking at our data, we can see that insiders have bought shares recently. This could signal that stock prices could go up and insiders are here for it.

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

See our latest analysis for Merchants Bancorp

What Does The Institutional Ownership Tell Us About Merchants Bancorp?

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 Merchants Bancorp does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Merchants 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 Merchants Bancorp. The company's CEO Michael Petrie is the largest shareholder with 30% of shares outstanding. With 7.0% and 3.4% of the shares outstanding respectively, Randall Rogers and BlackRock, Inc. are the second and third largest shareholders.

We did some more digging and found that 9 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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Merchants 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.

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.

Our information suggests that insiders maintain a significant holding in Merchants Bancorp. It has a market capitalization of just US$1.9b, and insiders have US$722m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Merchants 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.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Merchants Bancorp you should know about.

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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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.