Yahoo Finance Rithm Capital Corp.'s (NYSE:RITM) top owners are retail investors with 54% stake, while 45% is held by institutions
Key Insights
Significant control over Rithm Capital by retail investors implies that the general public has more power to influence management and governance-related decisions
34% of the business is held by the top 25 shareholders
Every investor in Rithm Capital Corp. (NYSE:RITM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutions on the other hand have a 45% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's take a closer look to see what the different types of shareholders can tell us about Rithm Capital.
See our latest analysis for Rithm Capital
What Does The Institutional Ownership Tell Us About Rithm 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.
As you can see, institutional investors have a fair amount of stake in Rithm Capital. 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 Rithm Capital's historic earnings and revenue below, but keep in mind there's always more to the story.
Rithm Capital is not owned by hedge funds. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 9.5% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 5.5% of common stock, and Geode Capital Management, LLC holds about 2.0% of the company stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Rithm Capital
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.
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.
Our most recent data indicates that insiders own less than 1% of Rithm Capital Corp.. Keep in mind that it's a big company, and the insiders own US$26m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public -- including retail investors -- own 54% of Rithm Capital. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Rithm Capital (of which 2 shouldn't be ignored!) you should know about.
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.
