Batu Kawan Berhad (KLSE:BKAWAN) insiders have significant skin in the game with 55% ownership

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

Sun, Nov 19, 2023, 7:17 PM 4 min read

Key Insights

Batu Kawan Berhad's significant insider ownership suggests inherent interests in company's expansion
The top 3 shareholders own 55% of the company
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Batu Kawan Berhad (KLSE:BKAWAN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% 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 Batu Kawan 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 Batu Kawan Berhad, beginning with the chart below.

Check out our latest analysis for Batu Kawan Berhad

ownership-breakdown — KLSE:BKAWAN Ownership Breakdown November 20th 2023

What Does The Lack Of Institutional Ownership Tell Us About Batu Kawan Berhad?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Batu Kawan Berhad's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

earnings-and-revenue-growth — KLSE:BKAWAN Earnings and Revenue Growth November 20th 2023

Batu Kawan Berhad is not owned by hedge funds. Our data shows that Oi Hian Lee is the largest shareholder with 44% of shares outstanding. With 5.9% and 5.7% of the shares outstanding respectively, Wan Hin Investments Sdn. Berhad and Eng Yeoh are the second and third largest shareholders. Eng Yeoh, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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 55% 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Batu Kawan 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Batu Kawan Berhad stock. This gives them a lot of power. Given it has a market cap of RM8.0b, that means insiders have a whopping RM4.4b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Batu Kawan Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 26%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Batu Kawan Berhad , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.