Stock Analysis

Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt.'s (BUSE:RICHTER) large institutional owners must be happy as stock continues to impress, up 5.2% over the past week

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BUSE:RICHTER
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Key Insights

  • Given the large stake in the stock by institutions, Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt's stock price might be vulnerable to their trading decisions
  • A total of 15 investors have a majority stake in the company with 50% ownership
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt. (BUSE:RICHTER) can tell us which group is most powerful. The group holding the most number of shares in the company, around 65% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 5.2% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 10%.

In the chart below, we zoom in on the different ownership groups of Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt.

View our latest analysis for Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt

ownership-breakdown
BUSE:RICHTER Ownership Breakdown December 5th 2023

What Does The Institutional Ownership Tell Us About Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt 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 Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BUSE:RICHTER Earnings and Revenue Growth December 5th 2023

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt. The company's largest shareholder is Corvinus University of Budapest, Endowment Arm, with ownership of 10%. In comparison, the second and third largest shareholders hold about 10% and 5.3% of the stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt

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.

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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Richter Gedeon Vegyészeti Gyár Nyilvánosan Muködo Rt , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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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