Key Insights

• Chicago Atlantic Real Estate Finance's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 47% of the company
• Insider ownership in Chicago Atlantic Real Estate Finance is 16%

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To get a sense of who is truly in control of Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 37% of the company’s shareholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

Let's delve deeper into each type of owner of Chicago Atlantic Real Estate Finance, beginning with the chart below.

See our latest analysis for Chicago Atlantic Real Estate Finance

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

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.

We can see that Chicago Atlantic Real Estate Finance does have institutional investors; and they hold a good portion of the company's stock. 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.

Hedge funds don't have many shares in Chicago Atlantic Real Estate Finance. BlackRock, Inc. is currently the largest shareholder, with 6.9% of shares outstanding. With 6.0% and 4.3% of the shares outstanding respectively, Ray Thurston and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company's CEO Anthony Cappell directly holds 1.7% of the total shares outstanding.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Chicago Atlantic Real Estate Finance, Inc.. It has a market capitalization of just US$320m, and insiders have US$51m 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

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chicago Atlantic Real Estate Finance. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Chicago Atlantic Real Estate Finance you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.