Significantly high institutional ownership implies Rocky Brands' stock price is sensitive to their trading actions

51% of the business is held by the top 12 shareholders

Insiders have sold recently

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If you want to know who really controls Rocky Brands, Inc. (NASDAQ:RCKY), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 73% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

Let's delve deeper into each type of owner of Rocky Brands, beginning with the chart below.

Check out our latest analysis for Rocky Brands

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.

Rocky Brands already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Rocky Brands, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Rocky Brands is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Raymond James Financial, Inc. with 7.5% of shares outstanding. FMR LLC is the second largest shareholder owning 7.4% of common stock, and Dimensional Fund Advisors LP holds about 6.9% of the company stock.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

We can report that insiders do own shares in Rocky Brands, Inc.. As individuals, the insiders collectively own US$8.1m worth of the US$222m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rocky Brands. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Rocky Brands (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.