Yahoo Finance Insiders were the biggest winners as Deleum Berhad's (KLSE:DELEUM) market cap grew by RM72m last week
Key Insights
Significant insider control over Deleum Berhad implies vested interests in company growth
A total of 4 investors have a majority stake in the company with 52% ownership
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Deleum Berhad (KLSE:DELEUM), 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 36% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, insiders benefitted the most after the company's market cap rose by RM72m last week.
Let's take a closer look to see what the different types of shareholders can tell us about Deleum Berhad.
View our latest analysis for Deleum Berhad
What Does The Institutional Ownership Tell Us About Deleum 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.
We can see that Deleum 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. 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 Deleum Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
Deleum Berhad is not owned by hedge funds. Lantas Mutiara Sdn Bhd is currently the largest shareholder, with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 11% of the stock. - Vivekananthan, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.
On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Deleum Berhad
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 Deleum Berhad. Insiders own RM178m worth of shares in the RM494m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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
Our data indicates that Private Companies hold 33%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Deleum Berhad better, we need to consider many other factors. Take risks for example - Deleum Berhad has 1 warning sign we think you should be aware of.
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.
