Hedge funds own 26% of Repare Therapeutics Inc. (NASDAQ:RPTX) shares but private equity firms control 36% of the company

Hedge funds own 26% of Repare Therapeutics Inc. (NASDAQ:RPTX) shares but private equity firms control 36% of the company

Every investor in Repare Therapeutics Inc. (NASDAQ:RPTX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And hedge funds on the other hand have a 26% ownership in the company.

Let’s delve deeper into each type of owner of Repare Therapeutics, beginning with the chart below.

Check out our latest analysis for Repare Therapeutics

ownership-breakdown

ownership-breakdown

What Does The Institutional Ownership Tell Us About Repare 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.

As you can see, institutional investors have a fair amount of stake in Repare Therapeutics. 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 Repare Therapeutics’ historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth

earnings-and-revenue-growth

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. Our data shows that BVF Partners L.P. is the largest shareholder with 20% of shares outstanding. The second and third largest shareholders are OrbiMed Advisors LLC and Versant Venture Management, LLC, with an equal amount of shares to their name at 7.9%.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company’s decision-making.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Repare Therapeutics Inc. in their own names. It seems the board members have no more than US$5.6m worth of shares in the US$610m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Repare Therapeutics. 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 36% stake in Repare Therapeutics. This suggests they can be influential in key policy decisions. 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:

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 2 warning signs for Repare Therapeutics (of which 1 is a bit unpleasant!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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