Institutions' substantial holdings in Relmada Therapeutics implies that they have significant influence over the company's share price
A total of 25 investors have a majority stake in the company with 46% ownership
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls Relmada Therapeutics, Inc. (NASDAQ:RLMD), then you'll have to look at the makeup of its share registry. With 48% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, institutional investors ended up benefitting the most after the company hit US$124m in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 46%.
In the chart below, we zoom in on the different ownership groups of Relmada Therapeutics.
What Does The Institutional Ownership Tell Us About Relmada Therapeutics?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Relmada Therapeutics does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Relmada Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.
earnings-and-revenue-growth
Hedge funds don't have many shares in Relmada Therapeutics. Kevin Kotler is currently the largest shareholder, with 6.3% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 4.2% of common stock, and Deep Track Capital, LP holds about 4.1% of the company stock. Furthermore, CEO Sergio Traversa is the owner of 0.8% of the company's shares.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Relmada 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Relmada Therapeutics, Inc.. In their own names, insiders own US$9.9m worth of stock in the US$124m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 44% 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.
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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Relmada Therapeutics (of which 1 is a bit concerning!) you should know about.
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.
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