- The considerable ownership by private equity firms in Repare Therapeutics indicates that they collectively have a greater say in management and business strategy
- 54% of the business is held by the top 6 shareholders
- Institutions own 28% of Repare Therapeutics
A look at the shareholders of Repare Therapeutics Inc. (NASDAQ:RPTX) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While private equity firms were the group that benefitted the most from last week’s US$53m market cap gain, institutions too had a 28% share in those profits.
Let's delve deeper into each type of owner of Repare Therapeutics, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Repare Therapeutics?
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.
We can see that Repare Therapeutics does have institutional investors; and they hold a good portion of the company's stock. 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 Repare Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
It would appear that 25% of Repare Therapeutics shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. BVF Partners L.P. is currently the largest shareholder, with 20% of shares outstanding. OrbiMed Advisors LLC is the second largest shareholder owning 7.9% of common stock, and CHI Advisors LLC holds about 7.1% of the company stock.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Repare Therapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our data suggests that insiders own under 1% of Repare Therapeutics Inc. in their own names. It has a market capitalization of just US$471m, and the board has only US$3.9m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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
Private equity firms hold a 33% stake in Repare Therapeutics. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
It's always worth thinking about the different groups who own shares in a company. But to understand Repare Therapeutics better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Repare Therapeutics (including 1 which doesn't sit too well with us) .
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.
Repare Therapeutics Inc., a clinical-stage precision oncology company, engages in the discovery and development of therapeutics by using its synthetic lethality approach in Canada and the United States.