A look at the shareholders of Ramaco Resources, Inc. (NASDAQ:METC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutional investors endured the highest losses after the company's share price fell by 9.6% last week. The recent loss, which adds to a one-year loss of 55% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell Ramaco Resources which might hurt individual investors.
In the chart below, we zoom in on the different ownership groups of Ramaco Resources.
NasdaqGS:METC Ownership Breakdown January 9th 2025
What Does The Institutional Ownership Tell Us About Ramaco Resources?
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.
Ramaco Resources 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Ramaco Resources' historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:METC Earnings and Revenue Growth January 9th 2025
We note that hedge funds don't have a meaningful investment in Ramaco Resources. Yorktown Partners LLC is currently the company's largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.1% and 4.7%, of the shares outstanding, respectively. Randall Atkins, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Ramaco Resources
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in Ramaco Resources, Inc.. Insiders own US$52m worth of shares in the US$502m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 20% stake in Ramaco Resources. 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.
Private Equity Ownership
Private equity firms hold a 28% stake in Ramaco Resources. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Ramaco Resources better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Ramaco Resources you should know about.
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.
