Avaland Berhad's (KLSE:AVALAND) top owners are public companies with 66% stake, while 16% is held by insiders

Key Insights

• Significant control over Avaland Berhad by public companies implies that the general public has more power to influence management and governance-related decisions

• The largest shareholder of the company is Ayala Land, Inc. with a 66% stake

• Insiders own 16% of Avaland Berhad

To get a sense of who is truly in control of Avaland Berhad (KLSE:AVALAND), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 66% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And individual insiders on the other hand have a 16% ownership in the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's delve deeper into each type of owner of Avaland Berhad, beginning with the chart below.

Check out our latest analysis for Avaland Berhad

ownership-breakdown

What Does The Lack Of Institutional Ownership Tell Us About Avaland Berhad?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. Avaland Berhad might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth

Avaland Berhad is not owned by hedge funds. Ayala Land, Inc. is currently the company's largest shareholder with 66% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 5.2% and 2.5%, of the shares outstanding, respectively.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Avaland 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.

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 a reasonable proportion of Avaland Berhad. Insiders own RM77m worth of shares in the RM488m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Avaland 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.

Public Company Ownership

We can see that public companies hold 66% of the Avaland 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.