Significant control over Bumi Armada Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
A total of 3 investors have a majority stake in the company with 53% ownership
If you want to know who really controls Bumi Armada Berhad (KLSE:ARMADA), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And individual investors on the other hand have a 26% ownership in the company.
Let's delve deeper into each type of owner of Bumi Armada Berhad, beginning with the chart below.
KLSE:ARMADA Ownership Breakdown September 24th 2023
What Does The Institutional Ownership Tell Us About Bumi Armada 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.
We can see that Bumi Armada Berhad does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Bumi Armada Berhad's earnings history below. Of course, the future is what really matters.
KLSE:ARMADA Earnings and Revenue Growth September 24th 2023
Hedge funds don't have many shares in Bumi Armada Berhad. Objeklif Bersatu Sdn Bhd is currently the largest shareholder, with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 6.1%, of the shares outstanding, respectively. Additionally, the company's CEO Gary Christenson directly holds 0.6% of the total shares outstanding.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 Bumi Armada Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
Our most recent data indicates that insiders own some shares in Bumi Armada Berhad. In their own names, insiders own RM53m worth of stock in the RM3.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 26% stake in Bumi Armada Berhad. 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 42%, of the Bumi Armada Berhad 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:
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. For instance, we've identified 1 warning sign for Bumi Armada Berhad that you should be aware of.
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.
