Institutional investors have a lot riding on Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) with 87% ownership

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Key Insights

  • Significantly high institutional ownership implies Pinnacle Financial Partners’ stock price is sensitive to their trading actions
  • The top 15 shareholders own 51% of the company
  • Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Pinnacle Financial Partners, Inc. (NASDAQ:PNFP), then you’ll have to look at the makeup of its share registry. With 87% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And as as result, institutional investors reaped the most rewards after the company’s stock price gained 4.4% last week. One-year return to shareholders is currently 11% and last week’s gain was the icing on the cake.

Let’s delve deeper into each type of owner of Pinnacle Financial Partners, beginning with the chart below.

Check out our latest analysis for Pinnacle Financial Partners

ownership-breakdown
NasdaqGS:PNFP Ownership Breakdown December 11th 2023

What Does The Institutional Ownership Tell Us About Pinnacle Financial Partners?

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.

We can see that Pinnacle Financial Partners does have institutional investors; and they hold a good portion of the company’s stock. 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 Pinnacle Financial Partners’ earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:PNFP Earnings and Revenue Growth December 11th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don’t have a meaningful investment in Pinnacle Financial Partners. The company’s largest shareholder is The Vanguard Group, Inc., with ownership of 9.3%. In comparison, the second and third largest shareholders hold about 9.0% and 5.7% of the stock.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 Pinnacle Financial Partners

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own some shares in Pinnacle Financial Partners, Inc.. The insiders have a meaningful stake worth US$137m. Most would see this as a real positive. 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

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pinnacle Financial Partners. 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 for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Pinnacle Financial Partners , and understanding them should be part of your investment process.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Pinnacle Financial Partners is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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