Yahoo Finance individual investors who own 60% along with institutions invested in Orchid Island Capital, Inc. (NYSE:ORC) saw increase in their holdings value last week
A look at the shareholders of Orchid Island Capital, Inc. (NYSE:ORC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While individual investors were the group that reaped the most benefits after last week’s 8.0% price gain, institutions also received a 32% cut.
Let's delve deeper into each type of owner of Orchid Island Capital, beginning with the chart below.
Check out our latest analysis for Orchid Island Capital
What Does The Institutional Ownership Tell Us About Orchid Island Capital?
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.
We can see that Orchid Island Capital does have institutional investors; and they hold a good portion of the company's stock. 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 Orchid Island Capital's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Orchid Island Capital. The company's largest shareholder is BlackRock, Inc., with ownership of 10%. Meanwhile, the second and third largest shareholders, hold 5.2% and 4.5%, of the shares outstanding, respectively.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Orchid Island Capital
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.
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 Orchid Island Capital, Inc. insiders own under 1% of the company. It appears that the board holds about US$1.1m worth of stock. This compares to a market capitalization of US$434m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 60% of Orchid Island Capital shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Orchid Island Capital (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report 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.
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