Institutional investors in Remitly Global, Inc. (NASDAQ:RELY) see US$143m decrease in market cap last week, although long-term gains have benefitted them.
Key Insights
Institutions' substantial holdings in Remitly Global implies that they have significant influence over the company's share price
A total of 9 investors have a majority stake in the company with 52% ownership
Every investor in Remitly Global, Inc. (NASDAQ:RELY) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 3.5% last week. However, the 102% one-year returns may have helped alleviate their overall losses. But they would probably be wary of future losses.
Let's delve deeper into each type of owner of Remitly Global, beginning with the chart below.
View our latest analysis for Remitly Global
What Does The Institutional Ownership Tell Us About Remitly Global?
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 Remitly Global 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 Remitly Global's 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 Remitly Global. The company's largest shareholder is Naspers Limited, with ownership of 20%. The Vanguard Group, Inc. is the second largest shareholder owning 6.3% of common stock, and JP Morgan Asset Management holds about 5.1% of the company stock. Additionally, the company's CEO Matthew Oppenheimer directly holds 2.6% of the total shares outstanding.
We did some more digging and found that 9 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Remitly Global
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.
Shareholders would probably be interested to learn that insiders own shares in Remitly Global, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$269m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Remitly Global. 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.
Public Company Ownership
Public companies currently own 20% of Remitly Global stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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. To that end, you should be aware of the 2 warning signs we've spotted with Remitly Global .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
