Yahoo Finance RCI Hospitality Holdings, Inc. (NASDAQ:RICK) most popular amongst individual investors who own 42% of the shares, institutions hold 36%
Key Insights
RCI Hospitality Holdings' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
50% of the business is held by the top 15 shareholders
A look at the shareholders of RCI Hospitality Holdings, Inc. (NASDAQ:RICK) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 36% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about RCI Hospitality Holdings.
See our latest analysis for RCI Hospitality Holdings
What Does The Institutional Ownership Tell Us About RCI Hospitality Holdings?
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.
We can see that RCI Hospitality Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 RCI Hospitality Holdings' earnings history below. Of course, the future is what really matters.
It would appear that 10% of RCI Hospitality Holdings shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is ADW Capital Management LLC with 10% of shares outstanding. Eric Langan is the second largest shareholder owning 7.6% of common stock, and BlackRock, Inc. holds about 6.7% of the company stock. Eric Langan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of RCI Hospitality Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in RCI Hospitality Holdings, Inc.. It has a market capitalization of just US$407m, and insiders have US$32m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 42% stake in RCI Hospitality Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 4.3%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
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. Take risks for example - RCI Hospitality Holdings has 3 warning signs we think you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
