Yahoo Finance RGB International Bhd.'s (KLSE:RGB) most bullish insider is CEO Kim Chuah, and their holdings value went up by 15% last week
Key Insights
Significant insider control over RGB International Bhd implies vested interests in company growth
The top 11 shareholders own 50% of the company
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
To get a sense of who is truly in control of RGB International Bhd. (KLSE:RGB), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders 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).
As a result, insiders scored the highest last week as the company hit RM478m market cap following a 15% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about RGB International Bhd.
Check out our latest analysis for RGB International Bhd
What Does The Institutional Ownership Tell Us About RGB International Bhd?
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.
RGB International Bhd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 RGB International Bhd's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in RGB International Bhd. With a 30% stake, CEO Kim Chuah is the largest shareholder. With 4.8% and 3.9% of the shares outstanding respectively, Zee Yang Lim and Great Eastern Life Assurance (Malaysia) Berhad, Insurance Investments are the second and third largest shareholders.
After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of RGB International Bhd
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
It seems insiders own a significant proportion of RGB International Bhd.. It has a market capitalization of just RM478m, and insiders have RM236m worth of shares in their own names. 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
The general public, who are usually individual investors, hold a 44% stake in RGB International Bhd. 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with RGB International Bhd (including 1 which is concerning) .
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
