With 64% ownership, PMB Technology Berhad (KLSE:PMBTECH) insiders have a lot riding on the company's future
Simply Wall St
4 min read
A look at the shareholders of PMB Technology Berhad (KLSE:PMBTECH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
So, insiders of PMB Technology Berhad have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
Let's delve deeper into each type of owner of PMB Technology Berhad, beginning with the chart below.
KLSE:PMBTECH Ownership Breakdown December 19th 2022
What Does The Institutional Ownership Tell Us About PMB Technology Berhad?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Since institutions own only a small portion of PMB Technology Berhad, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
KLSE:PMBTECH Earnings and Revenue Growth December 19th 2022
Hedge funds don't have many shares in PMB Technology Berhad. Looking at our data, we can see that the largest shareholder is Press Metal Aluminium Holdings Berhad with 22% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.
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 52% stake.
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 PMB Technology 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 PMB Technology Berhad. This means they can collectively make decisions for the company. Given it has a market cap of RM5.0b, that means insiders have a whopping RM3.2b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.
General Public Ownership
The general public-- including retail investors -- own 13% 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.
Public Company Ownership
Public companies currently own 22% of PMB Technology Berhad stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand PMB Technology Berhad better, we need to consider many other factors. Take risks for example - PMB Technology Berhad has 2 warning signs (and 1 which is significant) we think 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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