Yahoo Finance Great week for RIT Capital Partners plc (LON:RCP) institutional investors after losing 13% over the previous year
To get a sense of who is truly in control of RIT Capital Partners plc (LON:RCP), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 66% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week's UK£163m market cap gain would probably be appreciated by institutional investors, especially after a year of 13% losses.
Let's delve deeper into each type of owner of RIT Capital Partners, beginning with the chart below.
See our latest analysis for RIT Capital Partners
What Does The Institutional Ownership Tell Us About RIT Capital Partners?
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.
RIT Capital Partners 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at RIT Capital Partners' earnings history below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. RIT Capital Partners is not owned by hedge funds. Our data shows that The Rothschild Foundation, Endowment Arm is the largest shareholder with 9.9% of shares outstanding. Smith & Williamson Investment Management LLP is the second largest shareholder owning 5.7% of common stock, and Nathaniel Rothschild holds about 4.6% of the company stock.
Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of RIT Capital Partners
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. 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.
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.
We can see that insiders own shares in RIT Capital Partners plc. This is a big company, so it is good to see this level of alignment. Insiders own UK£175m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 18% stake in RIT Capital Partners. 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 Company Ownership
We can see that Private Companies own 8.6%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand RIT Capital Partners better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for RIT Capital Partners you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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