Key Insights

• The considerable ownership by retail investors in Hawthorn Bancshares indicates that they collectively have a greater say in management and business strategy

• A total of 25 investors have a majority stake in the company with 42% ownership

• Insider ownership in Hawthorn Bancshares is 16%

Every investor in Hawthorn Bancshares, Inc. (NASDAQ:HWBK) should be aware of the most powerful shareholder groups. With 56% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutions on the other hand have a 21% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of Hawthorn Bancshares.

Check out our latest analysis for Hawthorn Bancshares

What Does The Institutional Ownership Tell Us About Hawthorn Bancshares?

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 Hawthorn Bancshares 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 Hawthorn Bancshares' earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 5.8% of Hawthorn Bancshares shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Douglas Eden is currently the largest shareholder, with 9.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.8% and 4.1%, of the shares outstanding, respectively.

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.