Yahoo Finance Private companies in Sunway Berhad (KLSE:SUNWAY) are its biggest bettors, and their bets paid off as stock gained 7.0% last week
Key Insights
Sunway Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
56% of the business is held by the top 2 shareholders
Every investor in Sunway Berhad (KLSE:SUNWAY) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Clearly, private companies benefitted the most after the company's market cap rose by RM1.4b last week.
Let's take a closer look to see what the different types of shareholders can tell us about Sunway Berhad.
Check out our latest analysis for Sunway Berhad
What Does The Institutional Ownership Tell Us About Sunway Berhad?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Sunway Berhad. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Sunway Berhad's earnings history below. Of course, the future is what really matters.
Sunway Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Sungei Way Corporation Sdn Bhd with 45% of shares outstanding. With 11% and 5.7% of the shares outstanding respectively, Fook Ling Cheah and Employees Provident Fund of Malaysia are the second and third largest shareholders. Fook Ling Cheah, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Sunway 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.
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 information suggests that insiders maintain a significant holding in Sunway Berhad. Insiders own RM2.4b worth of shares in the RM21b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sunway 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
It seems that Private Companies own 49%, of the Sunway Berhad stock. 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:
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. To that end, you should learn about the 2 warning signs we've spotted with Sunway Berhad (including 1 which is potentially serious) .
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
