A US$13m drop in the market cap of Nuvectis Pharma, Inc. (NASDAQ:NVCT) is not what insiders like to see after purchasing shares recently

Key Insights

• Significant insider control over Nuvectis Pharma implies vested interests in company growth
• 53% of the business is held by the top 4 shareholders
• Insiders have been buying lately

A look at the shareholders of Nuvectis Pharma, Inc. (NASDAQ:NVCT) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And looking at our data, we can see that insiders have bought shares recently. Their expectations, however, were not satisfied, as the market cap dropped to US$115m over the past week.

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

See our latest analysis for Nuvectis Pharma

What Does The Institutional Ownership Tell Us About Nuvectis Pharma?

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.

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

Hedge funds don't have many shares in Nuvectis Pharma. Looking at our data, we can see that the largest shareholder is the CEO Ron Bentsur with 17% of shares outstanding. With 15% and 13% of the shares outstanding respectively, Charles Mosseri-Marlio and Charles Marlio are the second and third largest shareholders.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Nuvectis Pharma

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.

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.

It seems that insiders own more than half the Nuvectis Pharma, Inc. stock. This gives them a lot of power. That means they own US$76m worth of shares in the US$115m company. That's quite meaningful. 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 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nuvectis Pharma. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 5.2%, private equity firms could influence the Nuvectis Pharma board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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. Be aware that Nuvectis Pharma is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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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.