Market cap

The market capitalization of Ramelius Resources Limited (ASX:RMS) fell by A$85 million last week; retail investors who hold 56% have been affected as well as institutions

If you want to know who actually controls Ramelius Resources Limited (ASX:RMS), then you’ll need to look at the composition of its share ledger. And the group that holds the biggest slice of the pie are individual investors with 56% ownership. In other words, the group faces the maximum upside potential (or downside risk).

While institutions, which own 40% of the shares, were not spared by last week’s A$85m market capitalization drop, individual investors as a group suffered the maximum losses

In the table below, we zoom in on the different ownership groups of Ramelius Resources.

Discover our latest analysis for Ramelius Resources

distribution of property

What does institutional ownership tell us about the resources of Ramelius?

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.

Ramelius Resources already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Ramelius Resources’ historic revenue and earnings below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth

earnings-and-revenue-growth

Ramelius Resources does not belong to hedge funds. Our data shows that Van Eck Associates Corporation is the largest shareholder with 11% of shares outstanding. With 5.0% and 4.7% of the shares outstanding, respectively, Dimensional Fund Advisors LP and Ruffer LLP are the second and third largest shareholders. Additionally, we found that Mark Zeptner, the CEO, owns 0.5% of the shares awarded in his name.

Looking at our ownership data, we found that 25 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Insider Ownership of Ramelius Resources

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our most recent data indicates that insiders hold certain shares of Ramelius Resources Limited. As individuals, insiders collectively hold A$8.9 million worth of the A$622 million company. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have sold.

General public property

The general public, made up mostly of individual investors, collectively owns 56% of the shares of Ramelius Resources. This size of ownership gives mainstream investors a certain collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed corporate acquisitions.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Ramelius Resources, we need to consider many other factors. For example, we found 2 warning signs for Ramelius Resources which you should be aware of before investing here.

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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