Insiders of Remus Pharmaceuticals Limited (NSE:REMUS) were rewarded after last week’s 15% gain

Key Insights

• Significant insider control over Remus Pharmaceuticals implies vested interests in company growth
• The top 3 shareholders own 52% of the company
• Insiders have been buying lately

Every investor in Remus Pharmaceuticals Limited (NSE:REMUS) should be aware of the most powerful shareholder groups. With 70% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose ₹2.1b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Remus Pharmaceuticals.

Check out our latest analysis for Remus Pharmaceuticals

What Does The Lack Of Institutional Ownership Tell Us About Remus Pharmaceuticals?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in 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. Remus Pharmaceuticals might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Remus Pharmaceuticals is not owned by hedge funds. The company's CEO Arpit Shah is the largest shareholder with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 17% of the stock. Note that two of the top three shareholders are also Senior Key Executive and Chairman of the Board, respectively, once again pointing to significant ownership by company insiders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Remus Pharmaceuticals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Remus Pharmaceuticals Limited. This gives them effective control of the company. Given it has a market cap of ₹16b, that means they have ₹11b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Remus Pharmaceuticals. 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.

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 1 warning sign for Remus Pharmaceuticals that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.