The big shareholder groups in RISE Education Cayman Ltd (NASDAQ:REDU) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

RISE Education Cayman is not a large company by global standards. It has a market capitalization of US$321m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about RISE Education Cayman.

View our latest analysis for RISE Education Cayman

What Does The Institutional Ownership Tell Us About RISE Education Cayman?

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 RISE Education Cayman. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see RISE Education Cayman's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in RISE Education Cayman. Bain Capital, LP is currently the largest shareholder, with 63% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Morgan Stanley, Investment Banking and Brokerage Investments is the second largest shareholder owning 11% of common stock, and China Evergrande Group holds about 3.3% of the company stock.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of RISE Education Cayman

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.