Private companies account for 55% of Pharmaniaga Berhad's (KLSE:PHARMA) ownership, while individual investors account for 34%
Key Insights
Significant control over Pharmaniaga Berhad by private 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 55% ownership
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Pharmaniaga Berhad (KLSE:PHARMA), it is important to understand the ownership structure of the business. With 55% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And individual investors on the other hand have a 34% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about Pharmaniaga Berhad.
View our latest analysis for Pharmaniaga Berhad
What Does The Institutional Ownership Tell Us About Pharmaniaga 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.
Pharmaniaga Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Pharmaniaga Berhad's earnings history below. Of course, the future is what really matters.
Pharmaniaga Berhad is not owned by hedge funds. Boustead Holdings Berhad is currently the largest shareholder, with 47% of shares outstanding. With 7.8% and 5.9% of the shares outstanding respectively, Lembaga Tabung Angkatan Tentera and East Navigators Capital Ltd are the second and third largest shareholders.
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.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Pharmaniaga 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own some shares in Pharmaniaga Berhad. As individuals, the insiders collectively own RM15m worth of the RM519m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pharmaniaga Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
Our data indicates that Private Companies hold 55%, 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 Pharmaniaga Berhad better, we need to consider many other factors. Be aware that Pharmaniaga Berhad is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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.
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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.