With 34% ownership, Coastal Contracts Bhd (KLSE:COASTAL) insiders have a lot at stake

editorial-team@simplywallst.com (Simply Wall St)

Tue, Nov 21, 2023, 7:26 PM 4 min read

Key Insights

Insiders appear to have a vested interest in Coastal Contracts Bhd's growth, as seen by their sizeable ownership
The top 3 shareholders own 50% of the company
14% of Coastal Contracts Bhd is held by Institutions

To get a sense of who is truly in control of Coastal Contracts Bhd (KLSE:COASTAL), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Coastal Contracts Bhd regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about Coastal Contracts Bhd.

View our latest analysis for Coastal Contracts Bhd

ownership-breakdown — KLSE:COASTAL Ownership Breakdown November 22nd 2023

What Does The Institutional Ownership Tell Us About Coastal Contracts 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.

As you can see, institutional investors have a fair amount of stake in Coastal Contracts Bhd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Coastal Contracts Bhd, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:COASTAL Earnings and Revenue Growth November 22nd 2023

We note that hedge funds don't have a meaningful investment in Coastal Contracts Bhd. The company's largest shareholder is Ivory Asia Sdn. Bhd, with ownership of 28%. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 9.7% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Coastal Contracts 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.

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.

It seems insiders own a significant proportion of Coastal Contracts Bhd. Insiders own RM355m worth of shares in the RM1.0b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Coastal Contracts 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.

Private Company Ownership

It seems that Private Companies own 31%, of the Coastal Contracts Bhd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Coastal Contracts Bhd that you should be aware of.

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.