With a 76% stake, Regions Financial Corporation (NYSE: RF) enjoys strong institutional support
To get an idea of who actually controls Regions Financial Corporation (NYSE:RF), it’s important to understand the company’s ownership structure. The group with the largest number of shares in the company, around 76% to be precise, are institutions. In other words, the group faces the maximum upside potential (or downside risk).
Since institutional owners have a huge pool of resources and liquidity, their investment decisions tend to carry a lot of weight, especially with individual investors. Therefore, a large amount of institutional money invested in a company is generally considered a positive attribute.
Let’s dive deeper into each Regions Financial owner type, starting with the table below.
See our latest analysis for Regions Financial
What does institutional ownership tell us about Regions Financial?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors own a sizeable portion of Regions Financial. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Regions Financial’s historical revenue and earnings below, but keep in mind there’s always more to tell.
Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. We note that hedge funds have no significant investment in Regions Financial. The Vanguard Group, Inc. is currently the largest shareholder, with 12% of the shares outstanding. For context, the second shareholder owns approximately 11% of the outstanding shares, followed by a 6.7% ownership by the third shareholder.
A closer look at our ownership figures suggests that the top 20 shareholders hold a combined ownership of 51%, implying that no single shareholder has a majority.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Regions Financial Insider Ownership
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our data suggests that insiders own less than 1% of Regions Financial Corporation in their own name. Being so large, we wouldn’t expect insiders to own a large portion of the shares. Together they own $43 million worth of stock. It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.
General public property
The general public, who are usually individual investors, hold a 24% stake in Regions Financial. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.
I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. For example, we have identified 1 warning sign for the Financière des Régions of which you should be aware.
At the end of the day the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.