Stock Analysis

Is Rekor Systems, Inc. (NASDAQ:REKR) Popular Amongst Insiders?

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NasdaqCM:REKR
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The big shareholder groups in Rekor Systems, Inc. (NASDAQ:REKR) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Rekor Systems is a smaller company with a market capitalization of US$158m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Rekor Systems.

See our latest analysis for Rekor Systems

ownership-breakdown
NasdaqCM:REKR Ownership Breakdown November 26th 2020

What Does The Institutional Ownership Tell Us About Rekor Systems?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Rekor Systems. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Rekor Systems' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:REKR Earnings and Revenue Growth November 26th 2020

It looks like hedge funds own 7.3% of Rekor Systems shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. With a 18% stake, CEO Robert Berman is the largest shareholder. For context, the second largest shareholder holds about 7.3% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Interestingly, the third-largest shareholder, Richard Nathan is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 25 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Rekor Systems

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

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Rekor Systems, Inc.. Insiders have a US$45m stake in this US$158m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public holds a 50% stake in Rekor Systems. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Rekor Systems (2 shouldn't be ignored!) that you should be aware of before investing here.

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.

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