Yahoo Finance With 55% ownership, Malaysian Resources Corporation Berhad (KLSE:MRCB) boasts of strong institutional backing
Key Insights
Given the large stake in the stock by institutions, Malaysian Resources Corporation Berhad's stock price might be vulnerable to their trading decisions
The top 2 shareholders own 52% of the company
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls Malaysian Resources Corporation Berhad (KLSE:MRCB), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 55% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
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 Malaysian Resources Corporation Berhad.
Check out our latest analysis for Malaysian Resources Corporation Berhad
What Does The Institutional Ownership Tell Us About Malaysian Resources Corporation Berhad?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Malaysian Resources Corporation Berhad does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Malaysian Resources Corporation Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Malaysian Resources Corporation Berhad is not owned by hedge funds. Employees Provident Fund of Malaysia is currently the company's largest shareholder with 36% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 5.6%, of the shares outstanding, respectively.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
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 Malaysian Resources Corporation Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 most recent data indicates that insiders own less than 1% of Malaysian Resources Corporation Berhad. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about RM21m worth of stock. This compares to a market capitalization of RM3.1b. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in Malaysian Resources Corporation 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.
Private Company Ownership
We can see that Private Companies own 15%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Malaysian Resources Corporation Berhad better, we need to consider many other factors. Be aware that Malaysian Resources Corporation Berhad is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...
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.
