Individual investors account for 48% of The Real Brokerage Inc.'s (NASDAQ:REAX) ownership, while private equity firms account for 42%
Key Insights
The considerable ownership by individual investors in Real Brokerage indicates that they collectively have a greater say in management and business strategy
51% of the business is held by the top 7 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in The Real Brokerage Inc. (NASDAQ:REAX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And private equity firms on the other hand have a 42% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about Real Brokerage.
View our latest analysis for Real Brokerage
What Does The Institutional Ownership Tell Us About Real Brokerage?
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.
Less than 5% of Real Brokerage is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in Real Brokerage. Insight Venture Management, LLC is currently the largest shareholder, with 19% of shares outstanding. With 13% and 9.2% of the shares outstanding respectively, Magma Venture Partners and Cubit Investments Limited are the second and third largest shareholders. Additionally, the company's CEO Tamir Poleg directly holds 4.9% of the total shares outstanding.
On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Real Brokerage
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Shareholders would probably be interested to learn that insiders own shares in The Real Brokerage Inc.. It has a market capitalization of just US$537m, and insiders have US$46m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Real Brokerage. 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 Equity Ownership
With a stake of 42%, private equity firms could influence the Real Brokerage board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Real Brokerage better, we need to consider many other factors. For instance, we've identified 2 warning signs for Real Brokerage that 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.
