Kuala Lumpur Kepong Berhad's (KLSE:KLK) largest shareholders are public companies with 48% ownership, institutions own 32%
Key Insights
Significant control over Kuala Lumpur Kepong Berhad by public companies implies that the general public has more power to influence management and governance-related decisions
A total of 2 investors have a majority stake in the company with 62% ownership
Every investor in Kuala Lumpur Kepong Berhad (KLSE:KLK) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, institutions make up 32% of the company’s shareholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of Kuala Lumpur Kepong Berhad, beginning with the chart below.
Check out our latest analysis for Kuala Lumpur Kepong Berhad
What Does The Institutional Ownership Tell Us About Kuala Lumpur Kepong Berhad?
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 Kuala Lumpur Kepong Berhad. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Kuala Lumpur Kepong Berhad's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Kuala Lumpur Kepong Berhad. Our data shows that Batu Kawan Berhad is the largest shareholder with 48% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder.
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 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Kuala Lumpur Kepong Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
Our most recent data indicates that insiders own less than 1% of Kuala Lumpur Kepong Berhad. Keep in mind that it's a big company, and the insiders own RM127m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 15% stake in Kuala Lumpur Kepong Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 48% of the Kuala Lumpur Kepong Berhad shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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. Take risks for example - Kuala Lumpur Kepong Berhad has 3 warning signs (and 2 which can't be ignored) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.