Rathbones Group Plc's (LON:RAT) institutional shareholders had a great week as one-year returns increased after a 4.9% gain last week

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editorial-team@simplywallst.com (Simply Wall St)

Mon, Sep 25, 2023, 12:48 AM 4 min read

Key Insights

Given the large stake in the stock by institutions, Rathbones Group's stock price might be vulnerable to their trading decisions
A total of 22 investors have a majority stake in the company with 50% ownership
Insiders have been buying lately

A look at the shareholders of Rathbones Group Plc (LON:RAT) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 64% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 4.9% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 6.7%.

Let's take a closer look to see what the different types of shareholders can tell us about Rathbones Group.

View our latest analysis for Rathbones Group

ownership-breakdown — LSE:RAT Ownership Breakdown September 25th 2023

What Does The Institutional Ownership Tell Us About Rathbones Group?

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.

Rathbones Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Rathbones Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — LSE:RAT Earnings and Revenue Growth September 25th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Rathbones Group. Lindsell Train Limited is currently the company's largest shareholder with 7.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.3% and 3.6% of the stock.

A closer look at our ownership figures suggests that the top 22 shareholders have a combined ownership of 50% 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Rathbones Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 less than 1% of Rathbones Group Plc. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own UK£5.6m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Rathbones Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 4 warning signs for Rathbones Group (2 are concerning!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.