Yahoo Finance The recent 11% gain must have brightened Chief Investment Officer Philip King's week, Regal Partners Limited's (ASX:RPL) most bullish insider
Key Insights
Regal Partners' significant insider ownership suggests inherent interests in company's expansion
The top 2 shareholders own 67% of the company
A look at the shareholders of Regal Partners Limited (ASX:RPL) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, insiders scored the highest last week as the company hit AU$636m market cap following a 11% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Regal Partners.
See our latest analysis for Regal Partners
What Does The Institutional Ownership Tell Us About Regal Partners?
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.
Regal Partners already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Regal Partners' historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Regal Partners. Our data suggests that Philip King, who is also the company's Chief Investment Officer, holds the most number of shares at 35%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 32% of the shares outstanding, followed by an ownership of 9.0% by the third-largest shareholder. Furthermore, CEO Brendan O’Connor is the owner of 3.5% of the company's shares.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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. 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 Regal Partners
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own the majority of Regal Partners Limited. This means they can collectively make decisions for the company. So they have a AU$385m stake in this AU$636m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 19% stake in Regal Partners. 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.
Private Company Ownership
It seems that Private Companies own 9.0%, of the Regal Partners stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Regal Partners (1 is significant) that you should be aware of.
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.
