The ownership structure of REE Automotive Ltd. (NASDAQ: REE) could she tell us something useful?

0

If you want to know who actually controls REE Automotive Ltd. (NASDAQ: REE), then you will have to look at the makeup of its stock ledger. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.

REE Automotive has a market cap of US $ 1.2 billion, so we would expect some institutional investors to take notice of the action. In the graph below, we can see that institutional investors have bought into the company. Let’s take a closer look at what different types of shareholders can tell us about REE Automotive.

NasdaqGM: Distribution of REE ownership October 25, 2021

What does institutional ownership tell us about REE Automotive?

Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We can see that REE Automotive has institutional investors; and they own a large portion of the company’s stock. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out the earnings history of REE Automotive below. Of course, the future is what really matters.

profit and revenue growthNasdaqGM: REE Earnings and Revenue Growth October 25, 2021

Hedge funds don’t have a lot of shares in REE Automotive. The CEO of the company, Daniel Barel, is the largest shareholder with 26% of the shares outstanding. With respectively 26% and 8.5% of the shares outstanding, Ahishay Sardes and The Phoenix Excellence Pension & Provident Fund Ltd. are the second and third shareholders. Interestingly, the second largest shareholder, Ahishay Sardes, is also Top Key Executive, again, indicating strong insider ownership among the major shareholders of the company.

To make our study more interesting, we found that the 2 largest shareholders have a controlling stake in the company, which means that they are powerful enough to influence the decisions of the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.

Insider property of REE Automotive

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.

Insider ownership is positive when it indicates that executives think like the real 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 information suggests that insiders own more than half of REE Automotive Ltd. This gives them effective control of the business. This means that the insiders have a very significant US $ 884 million stake in this US $ 1.2 billion company. It’s good to see this level of investment. You can check here if these insiders have sold any of their shares.

General public property

With a 10% stake, the general public has some influence over REE Automotive. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. For example, we discovered 3 warning signs for REE Automotive (1 shouldn’t be ignored!) Which you should be aware of before investing here.

Ultimately 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 from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Source link

Share.

Leave A Reply