RAM Essential Services Property Fund's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
A total of 10 investors have a majority stake in the company with 50% ownership
Every investor in RAM Essential Services Property Fund (ASX:REP) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And institutions on the other hand have a 46% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of RAM Essential Services Property Fund.
What Does The Institutional Ownership Tell Us About RAM Essential Services Property Fund?
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.
RAM Essential Services Property Fund 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 RAM Essential Services Property Fund's historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:REP Earnings and Revenue Growth November 5th 2024
We note that hedge funds don't have a meaningful investment in RAM Essential Services Property Fund. The company's largest shareholder is Real Asset Management Group, with ownership of 31%. Meanwhile, the second and third largest shareholders, hold 4.7% and 4.6%, of the shares outstanding, respectively. In addition, we found that Scott Wehl, the CEO has 2.3% of the shares allocated to their name.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 RAM Essential Services Property Fund
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Shareholders would probably be interested to learn that insiders own shares in RAM Essential Services Property Fund. As individuals, the insiders collectively own AU$13m worth of the AU$326m company. This shows at least some alignment. 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 48% stake in RAM Essential Services Property Fund. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for RAM Essential Services Property Fund you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport 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.
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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.
