The recent 28% gain must have brightened CEO Zhenwu Huang’s week, Richtech Robotics Inc.’s (NASDAQ:RR) most bullish insider

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The recent 28% gain must have brightened CEO Zhenwu Huang’s week, Richtech Robotics Inc.’s (NASDAQ:RR) most bullish insider

Key Insights

Richtech Robotics’ significant insider ownership suggests inherent interests in company’s expansion

The top 2 shareholders own 56% of the company

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along with ownership data serve to give a strong idea about prospects for a business

Every investor in Richtech Robotics Inc. (NASDAQ:RR) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 74% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company’s market cap rose by US$22m last week.

In the chart below, we zoom in on the different ownership groups of Richtech Robotics.

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ownership-breakdown

What Does The Lack Of Institutional Ownership Tell Us About Richtech Robotics?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Richtech Robotics’ earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

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earnings-and-revenue-growth

Hedge funds don’t have many shares in Richtech Robotics. Looking at our data, we can see that the largest shareholder is the CEO Zhenwu Huang with 44% of shares outstanding. With 11% and 5.7% of the shares outstanding respectively, Zhenqiang Huang and Zhao Zilong are the second and third largest shareholders. Interestingly, the second-largest shareholder, Zhenqiang Huang is also Top Key Executive, again, pointing towards strong insider ownership amongst the company’s top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Story continues

Insider Ownership Of Richtech Robotics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems that insiders own more than half the Richtech Robotics Inc. stock. This gives them a lot of power. So they have a US$75m stake in this US$101m business. Most would argue this is a positive, showing strong alignment with shareholders. You can

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General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Richtech Robotics. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we’ve discovered

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that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free

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NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month ******* 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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with us directly. Alternatively, email *****@*****.tld

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#gain #brightened #CEO #Zhenwu #Huangs #week #Richtech #Robotics #Inc.s #NASDAQRR #bullish #insider

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