Kobay Technology Bhd. (KLSE:KOBAY) most popular amongst private companies who own 60% of the shares, institutions hold 21%
Simply Wall St
4 min read
Every investor in Kobay Technology Bhd. (KLSE:KOBAY) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 60% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 21% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
In the chart below, we zoom in on the different ownership groups of Kobay Technology Bhd.
What Does The Institutional Ownership Tell Us About Kobay Technology Bhd?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Kobay Technology Bhd does have institutional investors; and they hold a good portion of the company's stock. 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 Kobay Technology Bhd's earnings history below. Of course, the future is what really matters.
KLSE:KOBAY Earnings and Revenue Growth November 14th 2022
Kobay Technology Bhd is not owned by hedge funds. Kobay Holdings Sdn. Bhd is currently the company's largest shareholder with 34% of shares outstanding. With 19% and 5.0% of the shares outstanding respectively, Norinv Kapital Sdn. Bhd and Premiergrow Capital Sdn. Bhd. 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. 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 Kobay Technology Bhd
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Our data suggests that insiders own under 1% of Kobay Technology Bhd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than RM6.8m worth of shares in the RM913m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. 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
We can see that Private Companies own 60%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Kobay Technology Bhd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Kobay Technology Bhd you should know about.
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.
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