With 67% ownership in Rayonier Advanced Materials Inc. (NYSE:RYAM), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies Rayonier Advanced Materials' stock price is sensitive to their trading actions
• 52% of the business is held by the top 13 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Rayonier Advanced Materials Inc. (NYSE:RYAM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 67% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 11% last week. One-year return to shareholders is currently 200% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about Rayonier Advanced Materials.

View our latest analysis for Rayonier Advanced Materials

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

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.

We can see that Rayonier Advanced Materials does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Rayonier Advanced Materials' earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 9.6% of Rayonier Advanced Materials shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Condire Investors, LLC is currently the largest shareholder, with 9.6% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.7% of common stock, and Dimensional Fund Advisors LP holds about 5.5% of the company stock.

After doing some more digging, we found that the top 13 have the combined ownership of 52% 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Rayonier Advanced Materials

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.

We can see that insiders own shares in Rayonier Advanced Materials Inc.. It has a market capitalization of just US$514m, and insiders have US$21m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Be aware that Rayonier Advanced Materials is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

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.