How Many New Residential Investment Corp. (NYSE:NRZ) Shares Do Institutions Own?

Simply Wall St

February 7, 2022 4 min read

The big shareholder groups in New Residential Investment Corp. (NYSE:NRZ) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

New Residential Investment is a pretty big company. It has a market capitalization of US$4.8b. Normally institutions would own a significant portion of a company this size. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about New Residential Investment.

Check out our latest analysis for New Residential Investment

NYSE:NRZ Ownership Breakdown February 7th 2022

What Does The Institutional Ownership Tell Us About New Residential Investment?

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.

We can see that New Residential Investment 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of New Residential Investment, (below). Of course, keep in mind that there are other factors to consider, too.

NYSE:NRZ Earnings and Revenue Growth February 7th 2022

We note that hedge funds don't have a meaningful investment in New Residential Investment. The Vanguard Group, Inc. is currently the company's largest shareholder with 8.9% of shares outstanding. With 6.1% and 3.6% of the shares outstanding respectively, BlackRock, Inc. and FMR LLC are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of New Residential Investment

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 New Residential Investment Corp. insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$20m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in New Residential Investment, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand New Residential Investment better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with New Residential Investment (including 1 which doesn't sit too well with us) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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How Many New Residential Investment Corp. (NYSE:NRZ) Shares Do Institutions Own?

What Does The Institutional Ownership Tell Us About New Residential Investment?

Insider Ownership Of New Residential Investment

General Public Ownership

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