Panacea Biotec Limited's (NSE:PANACEABIO) most bullish insider, Co-Chief Executive Officer Rajesh Jain must be pleased with the recent 21% gain

Key Insights

• Panacea Biotec's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 66% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Panacea Biotec Limited (NSE:PANACEABIO) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 21% gain.

In the chart below, we zoom in on the different ownership groups of Panacea Biotec.

See our latest analysis for Panacea Biotec

What Does The Lack Of Institutional Ownership Tell Us About Panacea Biotec?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Panacea Biotec, for yourself, below.

We note that hedge funds don't have a meaningful investment in Panacea Biotec. Our data suggests that Rajesh Jain, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 49%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Sandeep Jain is the second largest shareholder owning 16% of common stock, and Poonawalla Investments & Industries Pvt. Ltd. holds about 7.0% of the company stock. Interestingly, the second-largest shareholder, Sandeep Jain is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 66% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Panacea Biotec

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own the majority of Panacea Biotec Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹9.7b, that means they have ₹6.8b 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 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Panacea Biotec. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 11%, of the Panacea Biotec stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Panacea Biotec .

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.