Key Insights
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Insiders appear to have a vested interest in Greatech Technology Berhad's growth, as seen by their sizeable ownership
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Eng Tan owns 52% of the company
If you want to know who really controls Greatech Technology Berhad ( KLSE:GREATEC ), 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 59% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Clearly, insiders benefitted the most after the company's market cap rose by RM427m last week.
Let's delve deeper into each type of owner of Greatech Technology Berhad, beginning with the chart below.
Check out our latest analysis for Greatech Technology Berhad
What Does The Institutional Ownership Tell Us About Greatech Technology 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.
We can see that Greatech Technology Berhad does have institutional investors; and they hold a good portion of the company's stock. 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 Greatech Technology Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Greatech Technology Berhad. The company's CEO Eng Tan is the largest shareholder with 52% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. For context, the second largest shareholder holds about 5.9% of the shares outstanding, followed by an ownership of 4.5% by the third-largest shareholder. Interestingly, the second-largest shareholder, Lean Khor is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Greatech Technology Berhad
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 that insiders own more than half the Greatech Technology Berhad stock. This gives them a lot of power. That means insiders have a very meaningful RM2.5b stake in this RM4.2b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. 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
We can see that Private Companies own 4.2%, of the shares on issue. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can find historic revenue and earnings in this detailed graph .
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 .
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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.
