Key Insights

• The considerable ownership by retail investors in RCM Technologies indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 51% of the company
• Insider ownership in RCM Technologies is 26%

A look at the shareholders of RCM Technologies, Inc. (NASDAQ:RCMT) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutions on the other hand have a 29% ownership in the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about RCM Technologies.

See our latest analysis for RCM Technologies

What Does The Institutional Ownership Tell Us About RCM Technologies?

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.

RCM Technologies already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of RCM Technologies, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 7.0% of RCM Technologies. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data suggests that Bradley Vizi, who is also the company's President, holds the most number of shares at 17%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. The second and third largest shareholders are Ben Andrews Revocable Trust and Renaissance Technologies LLC, with an equal amount of shares to their name at 7.0%.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of RCM Technologies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of RCM Technologies, Inc.. Insiders have a US$46m stake in this US$175m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 7.0%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand RCM Technologies better, we need to consider many other factors. For instance, we've identified 2 warning signs for RCM Technologies that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.