With 88% institutional ownership, Rambus Inc. (NASDAQ:RMBS) is a favorite amongst the big guns




  • In Business
  • 2022-11-26 12:37:20Z
  • By Simply Wall St.
 

To get a sense of who is truly in control of Rambus Inc. (NASDAQ:RMBS), it is important to understand the ownership structure of the business. With 88% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's delve deeper into each type of owner of Rambus, beginning with the chart below.

See our latest analysis for Rambus

What Does The Institutional Ownership Tell Us About Rambus?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Rambus does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Rambus' historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Rambus. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 5.1% of the stock.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Rambus

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Rambus Inc.. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around US$32m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rambus. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Rambus better, we need to consider many other factors. Be aware that Rambus is showing 1 warning sign in our investment analysis , 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You'll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

COMMENTS

More Related News

While private companies own 25% of Knaus Tabbert AG (ETR:KTA), private equity firms are its largest shareholders with 38% ownership
While private companies own 25% of Knaus Tabbert AG (ETR:KTA), private equity firms are its largest shareholders with 38% ownership

If you want to know who really controls Knaus Tabbert AG ( ETR:KTA ), then you'll have to look at the makeup of its...

Owning 61% in AYER Holdings Berhad (KLSE:AYER) means that insiders are heavily invested in the company
Owning 61% in AYER Holdings Berhad (KLSE:AYER) means that insiders are heavily invested in the company's future

To get a sense of who is truly in control of AYER Holdings Berhad ( KLSE:AYER ), it is important to understand the...

While insiders own 24% of Northern Minerals Limited (ASX:NTU), individual investors are its largest shareholders with 48% ownership
While insiders own 24% of Northern Minerals Limited (ASX:NTU), individual investors are its largest shareholders with 48% ownership

Every investor in Northern Minerals Limited ( ASX:NTU ) should be aware of the most powerful shareholder groups. The...

With a 70% stake, LGMS Berhad (KLSE:LGMS) insiders have a lot riding on the company
With a 70% stake, LGMS Berhad (KLSE:LGMS) insiders have a lot riding on the company

If you want to know who really controls LGMS Berhad ( KLSE:LGMS ), then you'll have to look at the makeup of its share...

While institutions invested in NexGen Energy Ltd. (TSE:NXE) benefited from last week
While institutions invested in NexGen Energy Ltd. (TSE:NXE) benefited from last week's 3.6% gain, individual investors stood to gain the most

To get a sense of who is truly in control of NexGen Energy Ltd. ( TSE:NXE ), it is important to understand the...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

  • 토토사이트
    (2022-11-29 01:53:30Z)

    We guarantee a list of Toto sites that can be enjoyed safely on Toto online gambling sites in Korea. The list of safe playgrounds included in the Food and Ride Control Recommendations list is filled with the best playgrounds, as well as the private boaters recommendations list by professional audit firm Toto.

    REPLY
  • 안전놀이터
    (2022-11-29 01:54:07Z)

    We guarantee a list of Toto sites that can be enjoyed safely on Toto online betting sites in Korea. The safety playground list included in the food and run verification recommendation list is filled with major playgrounds as good as the recommendation list of private Toto professional verification company boaters.

    REPLY
  • 사설토토
    (2022-11-29 01:54:27Z)

    Our approved company has Toto Safety Playground, which specializes in providing services from Toto site games to Seungmu, under/over and special games. A group of experts in the field of nutrition and genetic verification have carried out the site research at a high level, and it has become a great game for Toto without the chronic Toto problem.

    REPLY
  • splatoon 3
    (2022-12-01 04:25:46Z)

    You can choose your squad or play with your teammates prior to each match. You need only select the weapon and enter the fight. This game offers a beautiful visual design, an abundance of entertaining characters and locales, and thrilling gameplay types. If you enjoy this series of ink-based shooting games, don't miss Splatoon 3

    REPLY
  • nedalic142
    (2022-12-01 14:42:32Z)

    I am very impressed with your post because this post is very beneficial for me and provides new knowledge to me and many others people. Thanks for sharing.
    Recommended safety playground

    REPLY

Top News: Business