Retail investors account for 45% of RCI Hospitality Holdings, Inc.'s (NASDAQ:RICK) ownership, while institutions account for 33% (2024)

Key Insights

• RCI Hospitality Holdings' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public

• The top 25 shareholders own 50% of the company

• Institutional ownership in RCI Hospitality Holdings is 33%

Every investor in RCI Hospitality Holdings, Inc. (NASDAQ:RICK) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, institutions make up 33% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's delve deeper into each type of owner of RCI Hospitality Holdings, beginning with the chart below.

View our latest analysis for RCI Hospitality Holdings

What Does The Institutional Ownership Tell Us About RCI Hospitality Holdings?

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 RCI Hospitality Holdings. 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. 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 RCI Hospitality Holdings' earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 10% of RCI Hospitality Holdings shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. ADW Capital Management LLC is currently the largest shareholder, with 10% of shares outstanding. With 7.5% and 6.3% of the shares outstanding respectively, Eric Langan and BlackRock, Inc. are the second and third largest shareholders. Eric Langan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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.

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. 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 RCI Hospitality Holdings

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.

Our most recent data indicates that insiders own some shares in RCI Hospitality Holdings, Inc.. In their own names, insiders own US$45m worth of stock in the US$578m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RCI Hospitality Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 4.3%, of the RCI Hospitality Holdings stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 3 warning signs for RCI Hospitality Holdings that you should be aware of before investing here.

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.