Key Insights

• Significant control over SR Bancorp by retail investors implies that the general public has more power to influence management and governance-related decisions
• 40% of the business is held by the top 25 shareholders
• Insiders have bought recently

If you want to know who really controls SR Bancorp, Inc. (NASDAQ:SRBK), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutions on the other hand have a 33% ownership in the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

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

Check out our latest analysis for SR Bancorp

What Does The Institutional Ownership Tell Us About SR Bancorp?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in SR Bancorp. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see SR Bancorp's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in SR Bancorp. Looking at our data, we can see that the largest shareholder is Somerset Regal Bank Employee Stock Ownership Plan with 9.7% of shares outstanding. With 7.7% and 5.2% of the shares outstanding respectively, AllianceBernstein L.P. and The Vanguard Group, Inc. are the second and third largest shareholders. Furthermore, CEO William Taylor is the owner of 1.1% of the company's shares.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of SR Bancorp

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 SR Bancorp, Inc.. It has a market capitalization of just US$108m, and insiders have US$7.5m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 60% of SR Bancorp shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SR Bancorp better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for SR Bancorp you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.