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If you want to know who really controls Innovative Pharmaceutical Biotech Limited (HKG:399), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.
Innovative Pharmaceutical Biotech is a smaller company with a market capitalization of HK$483m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholder can tell us about 399.
View our latest analysis for Innovative Pharmaceutical Biotech
What Does The Lack Of Institutional Ownership Tell Us About Innovative Pharmaceutical Biotech?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Innovative Pharmaceutical Biotech's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Hedge funds don't have many shares in Innovative Pharmaceutical Biotech. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Innovative Pharmaceutical Biotech
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 a reasonable proportion of Innovative Pharmaceutical Biotech Limited. Insiders have a HK$189m stake in this HK$483m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.