key insights
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Significant control of Chicago Atlantic Real Estate Finance by private investors means the public has more power to influence management and governance decisions
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A total of 25 investors hold a majority stake in the company, holding 45% of the ownership.
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Insiders own 14% of Chicago Atlantic Real Estate Finance
If you want to know who really controls Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI), you’ll have to take a look at the makeup of its share registry. The group that owns the most shares in the company (about 49% to be exact) is retail investors. That is, if the stock price rises, the group will gain the most (or if the stock price falls, it will suffer the maximum loss).
Meanwhile, institutional investors account for 34% of the company’s shareholders. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies.
Let’s take a closer look to see what the different types of shareholders can tell us about Chicago Atlantic Real Estate Finance.
Check out our latest analysis for Chicago Atlantic Real Estate Finance.
What does institutional ownership tell us about Chicago Atlantic Real Estate Finance?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often see increased enthusiasm for a stock once it’s included in a major index. We would expect most companies to have some institutions on their register, especially if they are growing.
We can see that Chicago Atlantic Real Estate Finance does have institutional investors. And they own a significant portion of the company’s stock. This suggests some credibility among professional investors. But we can’t rely on that fact alone because institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see Chicago Atlantic Real Estate Finance’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Chicago Atlantic Real Estate Finance is not owned by hedge funds. Looking at our data, we see that the largest shareholder is BlackRock, Inc. with his 7.0% of the outstanding shares. Ray Thurston and Chicago Atlantic Advisors, Inc. hold 6.9% and 5.4% of the shares outstanding, respectively, making them the second and third largest shareholders. Additionally, CEO Anthony Capel owns his 1.7% of the company’s shares.
After reviewing our ownership data, we found that the 25 largest shareholders collectively own less than 50% of the share registry. This means that no single individual has a majority interest.
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. Quite a few analysts cover this stock, so you can find out its expected growth quite easily.
Insider ownership in Chicago Atlantic Real Estate Finance
The definition of an insider may vary slightly from country to country, but members of the board of directors are always considered. A company’s management runs the business, but the CEO answers to the board, even if he or she is a member of the board.
I generally consider insider ownership to be a good thing. In some cases, however, it may be more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a significant proportion of Chicago Atlantic Real Estate Finance. Insiders own US$41m worth of shares in the US$285m company. It’s great to see insiders are so invested in this business. It might be worth checking if those insiders have been buying recently.
Open to the public
The general public, usually retail investors, owns 49% of Chicago Atlantic Real Estate Finance’s shares. Although this size of ownership is significant, it may not be enough to change company policy if the decision is not aligned with other large shareholders.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risk for example – Chicago Atlantic Real Estate Finance two warning signs (And the one that makes me feel a little uncomfortable) I think you should know about.
If you’re like me, you might want to consider whether this company will grow or shrink. Luckily you can check this free report showing analyst forecasts for its future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.