After losing 7.8% in the past year, Peapack-Gladstone Financial Corporation (NASDAQ:PGC) institutional owners must be relieved by the recent gain

Key Insights

• Given the large stake in the stock by institutions, Peapack-Gladstone Financial’s stock price might be vulnerable to their trading decisions
• The top 12 shareholders own 51% of the company
• Recent purchases by insiders

A look at the shareholders of Peapack-Gladstone Financial Corporation (NASDAQ:PGC) can tell us which group is most powerful. With 73% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would probably welcome last week’s 13% increase in share prices after a year of 7.8% losses as a sign that returns are likely to begin trending higher.

In the chart below, we zoom in on the different ownership groups of Peapack-Gladstone Financial.

Check out our latest analysis for Peapack-Gladstone Financial

What Does The Institutional Ownership Tell Us About Peapack-Gladstone Financial?

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 Peapack-Gladstone Financial. 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. 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 Peapack-Gladstone Financial’s earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don’t have a meaningful investment in Peapack-Gladstone Financial. The company’s largest shareholder is BlackRock, Inc., with ownership of 7.8%. In comparison, the second and third largest shareholders hold about 7.4% and 6.0% of the stock. In addition, we found that Douglas Kennedy, the CEO has 0.5% of the shares allocated to their name.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Peapack-Gladstone Financial

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 Peapack-Gladstone Financial Corporation. Insiders have a US$54m stake in this US$494m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Peapack-Gladstone Financial. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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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.