Yahoo Finance Who Are The Top Investors In Real Matters Inc (TSE:REAL)?
In this article, I’m going to take a look at Real Matters Inc’s (TSE:REAL) latest ownership structure, a non-fundamental factor which is important, but remains a less discussed subject among investors. When it comes to ownership structure of a company, the impact has been observed in both the long-and short-term performance of shares. Since the same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, it is a useful exercise to deconstruct REAL’s shareholder registry.
Check out our latest analysis for Real Matters
Institutional Ownership
Institutions account for 31.36% of REAL’s outstanding shares, a significant enough holding to move stock prices if they start buying and selling in large quantities, especially when there are relatively small amounts of shares available on the market to trade. These moves, at least in the short-term, are generally observed in an institutional ownership mix comprising of active stock pickers, in particular levered hedge funds, which can cause large price swings. In the case of REAL, investors need not worry about such volatility considering active hedge funds don’t have a significant stake. However, we should dig deeper into REAL’s ownership structure and find out how other key ownership classes can affect its investment profile.
Insider Ownership
An important group of shareholders are company insiders. Insider ownership has to do more with how the company is managed and less to do with the direct impact of the magnitude of shares trading on the market. A major group of owners of REAL is individual insiders, sitting with a hefty 10.91% stake in the company. Broadly, insider ownership of this level has been found to negatively affect companies with consistently low PE ratio (underperforming). And a positive impact has been seen on companies with a high PE ratio (outperforming). It’s also interesting to learn what REAL insiders have been doing with their shareholdings lately. Insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.
General Public Ownership
A big stake of 45.94% in REAL is held by the general public. With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.
Public Company Ownership
Another important group of owners for potential investors in REAL are other public companies that hold a stake of 11.80% in REAL. These are the companies that are mainly invested due to their strategic interests or incentivized by reaping capital gains on investments. An ownership of this size indicates a strong financial backing and has the potential to influence REAL’s business strategy. Thus, investors should dig deeper into REAL’s business relations with these companies and how it can affect shareholder returns in the long-term.
Next Steps:
REAL’s considerably high level of institutional ownership calls for further analysis into its margin of safety. This will enable shareholders to comfortably invest in the company while avoid getting trapped in a sustained sell-off that is often observed in stocks with this level of institutional participation. However, if you are building an investment case for REAL, ownership structure alone should not dictate your decision to buy or sell the stock. Rather, you should be examining fundamental factors such as Real Matters’s past track record and financial health. I urge you to complete your research by taking a look at the following:
Future Outlook: What are well-informed industry analysts predicting for REAL’s future growth? Take a look at our free research report of analyst consensus for REAL’s outlook.
Financial Health: Are REAL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
