Retail investors who hold 36% of KORU Medical Systems, Inc. (NASDAQ:KRMD) gained 12%, institutions profited as well
REPRO MEDSYSTEMS INC KRMD | 2.58 2.58 | +1.98% 0.00% Pre |
Key Insights
- KORU Medical Systems' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 51% of the business is held by the top 8 shareholders
- 32% of KORU Medical Systems is held by Institutions
Every investor in KORU Medical Systems, Inc. (NASDAQ:KRMD) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While retail investors were the group that benefitted the most from last week’s US$14m market cap gain, institutions too had a 32% share in those profits.
In the chart below, we zoom in on the different ownership groups of KORU Medical Systems.
View our latest analysis for KORU Medical Systems
What Does The Institutional Ownership Tell Us About KORU Medical Systems?
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.
We can see that KORU Medical Systems 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 KORU Medical Systems' historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 24% of KORU Medical Systems 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. Horton Capital Management, LLC is currently the largest shareholder, with 17% of shares outstanding. With 11% and 8.1% of the shares outstanding respectively, First Light Asset Management, LLC and Archon Capital Management LLC are the second and third largest shareholders. In addition, we found that Linda Tharby, the CEO has 4.0% of the shares allocated to their name.
We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of KORU Medical Systems
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.
We can report that insiders do own shares in KORU Medical Systems, Inc.. As individuals, the insiders collectively own US$6.2m worth of the US$110m 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 36% stake in the company, and hence can't easily be ignored. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand KORU Medical Systems better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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.