Regencell Bioscience Holdings Limited's (NASDAQ:RGC) most bullish insider is CEO Yat-Gai Au, and their holdings value went up by 74% last week

Key Insights

• Insiders appear to have a vested interest in Regencell Bioscience Holdings' growth, as seen by their sizeable ownership
• The largest shareholder of the company is Yat-Gai Au with a 81% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Regencell Bioscience Holdings Limited (NASDAQ:RGC) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 81% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit US$105m market cap following a 74% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Regencell Bioscience Holdings.

See our latest analysis for Regencell Bioscience Holdings

What Does The Lack Of Institutional Ownership Tell Us About Regencell Bioscience Holdings?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. 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 Regencell Bioscience Holdings, for yourself, below.

Regencell Bioscience Holdings is not owned by hedge funds. The company's CEO Yat-Gai Au is the largest shareholder with 81% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 7.6% and 0.05%, of the shares outstanding, respectively.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Regencell Bioscience Holdings

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.

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.

It seems that insiders own more than half the Regencell Bioscience Holdings Limited stock. This gives them a lot of power. Given it has a market cap of US$105m, that means they have US$85m 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

The general public, who are usually individual investors, hold a 11% stake in Regencell Bioscience Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 7.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Regencell Bioscience Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Regencell Bioscience Holdings that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.