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A look at the shareholders of RMA Global Limited (ASX:RMY) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
With a market capitalization of AU$81m, RMA Global is a small cap stock, so it might not be well known by many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about RMY.
See our latest analysis for RMA Global
What Does The Institutional Ownership Tell Us About RMA Global?
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.
RMA Global already has institutions on the share registry. Indeed, they own 8.3% of the company. 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. 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 RMA Global, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in RMA Global. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of RMA Global
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
It seems that insiders own more than half the RMA Global Limited stock. This gives them a lot of power. That means they own AU$49m worth of shares in the AU$81m company. That’s quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.