Key Insights

• Given the large stake in the stock by institutions, Regis Resources' stock price might be vulnerable to their trading decisions

• A total of 11 investors have a majority stake in the company with 52% ownership

• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Regis Resources Limited (ASX:RRL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 67% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would appreciate the 9.2% increase in share price last week, given their one-year losses have totalled a disappointing 3.1%.

In the chart below, we zoom in on the different ownership groups of Regis Resources.

See our latest analysis for Regis Resources

What Does The Institutional Ownership Tell Us About Regis Resources?

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.

Regis Resources 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 Regis Resources, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Regis Resources. The company's largest shareholder is Van Eck Associates Corporation, with ownership of 11%. Meanwhile, the second and third largest shareholders, hold 5.2% and 5.1%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.