Key Insights

• Significant control over RGC Resources by retail investors implies that the general public has more power to influence management and governance-related decisions

• The top 25 shareholders own 49% of the company

• Insiders have been buying lately

To get a sense of who is truly in control of RGC Resources, Inc. (NASDAQ:RGCO), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 36% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

In the chart below, we zoom in on the different ownership groups of RGC Resources.

View our latest analysis for RGC Resources

What Does The Institutional Ownership Tell Us About RGC Resources?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in RGC Resources. 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 RGC Resources, (below). Of course, keep in mind that there are other factors to consider, too.

RGC Resources is not owned by hedge funds. Anita Zucker is currently the company's largest shareholder with 14% of shares outstanding. For context, the second largest shareholder holds about 5.8% of the shares outstanding, followed by an ownership of 4.2% by the third-largest shareholder. In addition, we found that Paul Nester, the CEO has 0.8% 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 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.