Retail investors who have a significant stake must be disappointed along with institutions after Redcare Pharmacy NV's (ETR:RDC) market cap dropped by €513m

Key Insights

• Significant control over Redcare Pharmacy by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 12 investors have a majority stake in the company with 51% ownership
• 17% of Redcare Pharmacy is held by insiders

A look at the shareholders of Redcare Pharmacy NV (ETR:RDC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of retail investors took a hit after last week’s 16% price drop, institutions with their 32% holdings also suffered.

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

View our latest analysis for Redcare Pharmacy

What Does The Institutional Ownership Tell Us About Redcare Pharmacy?

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.

Redcare Pharmacy 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. 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 Redcare Pharmacy, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Redcare Pharmacy. Galenica AG is currently the company's largest shareholder with 10% of shares outstanding. With 7.2% and 5.2% of the shares outstanding respectively, Mk Beleggingsmaatschappij Venlo and Capital Research and Management Company are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Redcare Pharmacy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Redcare Pharmacy NV. It has a market capitalization of just €2.7b, and insiders have €471m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Redcare Pharmacy. 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

We can see that Private Companies own 7.4%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 10% of the Redcare Pharmacy shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Redcare Pharmacy , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.