If you want to know who really controls Regencell Bioscience Holdings Limited (NASDAQ:RGC), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 81% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, insiders were the biggest beneficiaries of last week’s 321% gain.
Let's delve deeper into each type of owner of Regencell Bioscience Holdings, beginning with the chart below.
What Does The Lack Of Institutional Ownership Tell Us About Regencell Bioscience Holdings?
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 funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Regencell Bioscience Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
NasdaqCM:RGC Earnings and Revenue Growth July 25th 2024
Regencell Bioscience Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Yat-Gai Au with 81% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Meanwhile, the second and third largest shareholders, hold 7.6% and 0.05%, of the shares outstanding, respectively.
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. 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 Regencell Bioscience Holdings
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. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own the majority of Regencell Bioscience Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of US$195m, that means they have US$158m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Regencell Bioscience Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 7.6% stake in Regencell Bioscience Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Regencell Bioscience Holdings you should know about.
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.
