With 76% ownership, Radium Development Berhad (KLSE:RADIUM) insiders have a lot at stake
editorial-team@simplywallst.com (Simply Wall St)
5 min read
Key Insights
Radium Development Berhad's significant insider ownership suggests inherent interests in company's expansion
The top 2 shareholders own 57% of the company
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of Radium Development Berhad (KLSE:RADIUM), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 76% ownership. 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 Radium Development Berhad.
What Does The Institutional Ownership Tell Us About Radium Development 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.
Radium Development Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Radium Development Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:RADIUM Earnings and Revenue Growth August 15th 2024
We note that hedge funds don't have a meaningful investment in Radium Development Berhad. The company's CEO Kah Gan is the largest shareholder with 48% of shares outstanding. With 9.7% and 8.6% of the shares outstanding respectively, Tiong Gan and Kok Gan are the second and third largest shareholders. Interestingly, the third-largest shareholder, Kok Gan is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
After doing some more digging, we found that the top 2 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Radium Development Berhad
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 that insiders own more than half the Radium Development Berhad stock. This gives them a lot of power. That means they own RM1.3b worth of shares in the RM1.7b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Radium Development Berhad. 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 3.8%, 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.
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.
