Insiders the biggest winners as Amneal Pharmaceuticals, Inc.'s (NASDAQ:AMRX) market cap rises to US$1.8b
Key Insights
Amneal Pharmaceuticals' significant insider ownership suggests inherent interests in company's expansion
The top 5 shareholders own 52% of the company
If you want to know who really controls Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX), then you'll have to look at the makeup of its share registry. With 53% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders were the biggest beneficiaries of last week’s 5.9% gain.
In the chart below, we zoom in on the different ownership groups of Amneal Pharmaceuticals.
See our latest analysis for Amneal Pharmaceuticals
What Does The Institutional Ownership Tell Us About Amneal Pharmaceuticals?
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.
As you can see, institutional investors have a fair amount of stake in Amneal Pharmaceuticals. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Amneal Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Amneal Pharmaceuticals. Our data shows that Tushar Patel is the largest shareholder with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.9% and 8.8%, of the shares outstanding, respectively. Furthermore, CEO Chirag Patel is the owner of 7.1% of the company's shares.
Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Amneal Pharmaceuticals
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 information suggests that insiders own more than half of Amneal Pharmaceuticals, Inc.. This gives them effective control of the company. Insiders own US$960m worth of shares in the US$1.8b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Amneal Pharmaceuticals. 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
We can see that Private Companies own 7.0%, of the shares on issue. 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. Case in point: We've spotted 2 warning signs for Amneal Pharmaceuticals you should be aware of, and 1 of them shouldn't be ignored.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
