Yahoo Finance Institutional investors own a significant stake of 40% in Gamuda Berhad (KLSE:GAMUDA)
Key Insights
Given the large stake in the stock by institutions, Gamuda Berhad's stock price might be vulnerable to their trading decisions
A total of 11 investors have a majority stake in the company with 50% ownership
A look at the shareholders of Gamuda Berhad (KLSE:GAMUDA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of Gamuda Berhad.
View our latest analysis for Gamuda Berhad
What Does The Institutional Ownership Tell Us About Gamuda Berhad?
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 Gamuda Berhad does have institutional investors; and they hold a good portion of the company's stock. 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 Gamuda Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
Gamuda Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Permodalan Nasional Berhad with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.6% and 4.2% of the stock. Eleena Binti Almarhum Sultan Muhibbuddin Shah Al-Maghfur-lah, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Yun Lin is the owner of 2.9% of the company's shares.
After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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 Gamuda Berhad
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.
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 insiders maintain a significant holding in Gamuda Berhad. Insiders own RM1.4b worth of shares in the RM14b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gamuda Berhad. 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:
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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Gamuda Berhad you should know about.
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.
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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.
