Repare Therapeutics Inc.'s (NASDAQ:RPTX) market cap touched US$481m last week, benefiting both private equity firms who own 34% as well as institutions
Key Insights
Significant control over Repare Therapeutics by private equity firms implies that the general public has more power to influence management and governance-related decisions
A total of 6 investors have a majority stake in the company with 55% ownership
If you want to know who really controls Repare Therapeutics Inc. (NASDAQ:RPTX), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While private equity firms were the group that reaped the most benefits after last week’s 11% price gain, institutions also received a 28% cut.
Let's take a closer look to see what the different types of shareholders can tell us about Repare Therapeutics.
View our latest analysis for Repare Therapeutics
What Does The Institutional Ownership Tell Us About Repare Therapeutics?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Repare Therapeutics 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 Repare Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 26% of Repare Therapeutics shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is BVF Partners L.P., with ownership of 20%. Meanwhile, the second and third largest shareholders, hold 7.9% and 7.1%, of the shares outstanding, respectively.
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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
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.
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.
Our information suggests that Repare Therapeutics Inc. insiders own under 1% of the company. It has a market capitalization of just US$481m, and the board has only US$4.4m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, who are usually individual investors, hold a 11% stake in Repare Therapeutics. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With a stake of 34%, private equity firms could influence the Repare Therapeutics board. 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.
Next Steps:
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. For instance, we've identified 2 warning signs for Repare Therapeutics (1 shouldn't be ignored) that you should be aware of.
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.
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