Key Insights

• Significant control over Chicago Atlantic Real Estate Finance by retail investors implies that the general public has more power to influence management and governance-related decisions

• 41% of the business is held by the top 25 shareholders

• 17% of Chicago Atlantic Real Estate Finance is held by insiders

Every investor in Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) should be aware of the most powerful shareholder groups. With 54% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutions on the other hand have a 28% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

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 The Institutional Ownership Tell Us About Chicago Atlantic Real Estate Finance?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Chicago Atlantic Real Estate Finance. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Chicago Atlantic Real Estate Finance's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Chicago Atlantic Real Estate Finance. Our data shows that BlackRock, Inc. is the largest shareholder with 6.9% of shares outstanding. Ray Thurston is the second largest shareholder owning 6.5% of common stock, and The Vanguard Group, Inc. holds about 4.0% of the company stock. In addition, we found that Anthony Cappell, the CEO has 1.9% of the shares allocated to their name.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Chicago Atlantic Real Estate Finance

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 information suggests that insiders maintain a significant holding in Chicago Atlantic Real Estate Finance, Inc.. It has a market capitalization of just US$300m, and insiders have US$53m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Chicago Atlantic Real Estate Finance, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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 2 warning signs for Chicago Atlantic Real Estate Finance (1 is potentially serious!) that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.