Key Insights

• Significantly high institutional ownership implies Rayonier Advanced Materials' stock price is sensitive to their trading actions
• 51% of the business is held by the top 13 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Our free stock report includes 1 warning sign investors should be aware of before investing in Rayonier Advanced Materials. Read for free now.

To get a sense of who is truly in control of Rayonier Advanced Materials Inc. (NYSE:RYAM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 70% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors was the group most impacted after the company's market cap fell to US$309m last week. Still, the 5.0% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future.

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

See our latest analysis for Rayonier Advanced Materials

What Does The Institutional Ownership Tell Us About Rayonier Advanced Materials?

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 Rayonier Advanced Materials 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 Rayonier Advanced Materials' historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 9.6% of Rayonier Advanced Materials shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Condire Investors, LLC is the largest shareholder with 9.6% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.9% of common stock, and Dimensional Fund Advisors LP holds about 6.0% of the company stock. Additionally, the company's CEO De Lyle Bloomquist directly holds 0.6% of the total shares outstanding.

After doing some more digging, we found that the top 13 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Rayonier Advanced Materials

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Rayonier Advanced Materials Inc.. As individuals, the insiders collectively own US$14m worth of the US$309m company. 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

The general public, who are usually individual investors, hold a 16% stake in Rayonier Advanced Materials. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Rayonier Advanced Materials , and understanding them should be part of your investment process.

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.

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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.