Institutional investors are Western Alliance Bancorporation's (NYSE:WAL) biggest bettors and were rewarded after last week's US$687m market cap gain

Thu, Sep 19, 2024, 5:50 AM 4 min read

If you want to know who really controls Western Alliance Bancorporation (NYSE:WAL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 84% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 8.0% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 90%.

Let's delve deeper into each type of owner of Western Alliance Bancorporation, beginning with the chart below.

See our latest analysis for Western Alliance Bancorporation

What Does The Institutional Ownership Tell Us About Western Alliance Bancorporation?

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.

Western Alliance Bancorporation already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Western Alliance Bancorporation, (below). Of course, keep in mind that there are other factors to consider, too.

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 Western Alliance Bancorporation. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 9.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.0% and 5.0%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. 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 Western Alliance Bancorporation

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Western Alliance Bancorporation. It is a very large company, and board members collectively own US$469m worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Western Alliance Bancorporation. 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. For example, we've discovered 2 warning signs for Western Alliance Bancorporation that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Terms

and

WA Consumer Health Privacy Policy

Your privacy controls

News

Life

Entertainment

Finance

Sports

New on Yahoo

Yahoo Finance

Institutional investors are Western Alliance Bancorporation's (NYSE:WAL) biggest bettors and were rewarded after last week's US$687m market cap gain

In This Article:

Key Insights

What Does The Institutional Ownership Tell Us About Western Alliance Bancorporation?

Insider Ownership Of Western Alliance Bancorporation

General Public Ownership

Next Steps:

Recommended Stories