With 44% ownership, Econpile Holdings Berhad (KLSE:ECONBHD) insiders have a lot at stake

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

Thu, Apr 11, 2024, 7:44 PM 4 min read

Key Insights

Significant insider control over Econpile Holdings Berhad implies vested interests in company growth
The top 3 shareholders own 51% of the company
Institutional ownership in Econpile Holdings Berhad is 19%

To get a sense of who is truly in control of Econpile Holdings Berhad (KLSE:ECONBHD), it is important to understand the ownership structure of the business. With 44% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

In the chart below, we zoom in on the different ownership groups of Econpile Holdings Berhad.

Check out our latest analysis for Econpile Holdings Berhad

ownership-breakdown — KLSE:ECONBHD Ownership Breakdown April 12th 2024

What Does The Institutional Ownership Tell Us About Econpile Holdings Berhad?

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 Econpile Holdings Berhad. 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. 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 Econpile Holdings Berhad's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — KLSE:ECONBHD Earnings and Revenue Growth April 12th 2024

Econpile Holdings Berhad is not owned by hedge funds. Our data suggests that Cheng The, who is also the company's Top Key Executive, holds the most number of shares at 25%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 6.8% by the third-largest shareholder. Interestingly, the second-largest shareholder, Sar Pang is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Econpile Holdings Berhad

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.

Our information suggests that insiders maintain a significant holding in Econpile Holdings Berhad. Insiders own RM304m worth of shares in the RM687m company. 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 36% stake in Econpile Holdings Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Econpile Holdings Berhad you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.