Are institutions heavily invested in Rathbone Brothers Plc (LON: RAT) stocks?


The major stakeholder groups of Rathbone Brothers Plc (LON: RAT) hold power over the company. Large companies usually have institutions as shareholders, and we usually see insiders who own stakes in smaller companies. We also tend to see a lower proportion of insiders in companies that were previously publicly owned.

With a market cap of £ 1.1 billion, Rathbone Brothers is a decent size so it’s likely on institutional investor radar. In the following graphic we can see that institutions stand out in the share register. We can zoom in on the various groups of owners to learn more about Rathbone Brothers.

Check out our latest analysis for Rathbone Brothers

LSE: RAT Property Breakdown June 29, 2021

What does institutional ownership tell us about Rathbone Brothers?

Institutional investors often compare their own returns to the returns of a frequently tracked index. As a result, they typically consider buying larger companies that are included in the relevant benchmark index.

Rathbone Brothers already has institutions on its share register. In fact, they own a respectable stake in the company. This implies that the analysts who work for these institutions have looked at the stock and like it. But like everyone else, they can be wrong too. It’s not uncommon for the stock price to drop sharply when two large institutional investors are trying to sell a stock at the same time. So it’s worth checking out Rathbone Brothers’ earnings history so far (below). Of course, keep in mind that there are other factors to consider as well.

Revenue-and-revenue growth
LSE: RAT earnings and sales growth June 29, 2021

Investors should note that institutions actually own more than half of the company, so together they can exert significant power. We find that hedge funds do not have a sound investment in Rathbone Brothers. Our data shows that Lindsell Train Limited is the largest shareholder with 11% of the shares outstanding. Rathbone Investment Management Limited is the second largest shareholder with 6.9% of the common stock and Heronbridge Investment Management LLP owns approximately 6.0% of the company’s stock.

Upon further examination, we found that more than half of the company’s stock is owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by the smaller shareholders.

While studying the institutional ownership of a company can add value to your research, researching analyst recommendations to get a deeper understanding of a stock’s expected performance is also good practice. There are a fair number of analysts covering the stock, so it might be useful to find out their aggregate view of the future.

Rathbone Brothers insider owned

The definition of an insider can vary slightly from country to country, but board members always count. The company management is subordinate to the board of directors and this should represent the interests of the shareholders. It is noteworthy that sometimes top managers sit on the board themselves.

Insider ownership is positive when it signals that management thinks like the real owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative under certain circumstances.

Our latest data shows that insiders own less than 1% of Rathbone Brothers Plc. Remember, this is a large company and Insider owns £ 5.0m worth of shares. The absolute value could be more important than the proportional part. It is arguably just as important to consider recent purchases and sales. You can click here to see if Insiders bought or sold.

General public property

With a 17% share, the public has some influence on Rathbone Brothers. While this group may not necessarily be in charge, it can certainly have a real impact on how the company is run.

Next Steps:

It is always worth thinking about the different groups that own shares in a company. But to better understand Rathbone Brothers, we need to consider many other factors. To do this, you should check out the 3 warning signs We spotted with Rathbone Brothers.

But in the end it is the future, not the past that will determine how well the owners of this company will fare. Hence, we think it would be wise to take a look at this free report which shows whether analysts are predicting a brighter future.

Note: The numbers in this article are calculated using data for the past twelve months, which refers to the twelve month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the annual financial statements.

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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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About Nina Snider

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