Key Insights
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Significant insider control over SDS Group Berhad implies vested interests in company growth
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The top 3 shareholders own 55% of the company
To get a sense of who is truly in control of SDS Group Berhad ( KLSE:SDS ), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 76% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of SDS Group Berhad regarding the company's future would be crucial to them.
In the chart below, we zoom in on the different ownership groups of SDS Group Berhad.
View our latest analysis for SDS Group Berhad
What Does The Institutional Ownership Tell Us About SDS Group 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.
SDS Group Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see SDS Group Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
SDS Group Berhad is not owned by hedge funds. With a 26% stake, CEO Kim Tan is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 24% and 5.1%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Kim Tan is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 SDS Group 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 the majority of SDS Group Berhad. This means they can collectively make decisions for the company. That means they own RM315m worth of shares in the RM414m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to discover (for free) if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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.
Many find it usefulto take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts .
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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.
