Dutch Lady Milk Industries Berhad (KLSE:DLADY) stock most popular amongst private companies who own 52%, while individual investors hold 20%
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Significant control over Dutch Lady Milk Industries Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
51% of the company is held by a single shareholder (Zuivelcoöperatie Frieslandcampina U.A.)
To get a sense of who is truly in control of Dutch Lady Milk Industries Berhad (KLSE:DLADY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 52% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Individual investors, on the other hand, account for 20% of the company's stockholders.
In the chart below, we zoom in on the different ownership groups of Dutch Lady Milk Industries Berhad.
What Does The Institutional Ownership Tell Us About Dutch Lady Milk Industries 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 Dutch Lady Milk Industries Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Dutch Lady Milk Industries Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
KLSE:DLADY Earnings and Revenue Growth August 12th 2024
We note that hedge funds don't have a meaningful investment in Dutch Lady Milk Industries Berhad. Looking at our data, we can see that the largest shareholder is Zuivelcoöperatie Frieslandcampina U.A. with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. Permodalan Nasional Berhad is the second largest shareholder owning 8.2% of common stock, and Employees Provident Fund of Malaysia holds about 5.9% of the company stock.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Dutch Lady Milk Industries 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.
We can see that insiders own shares in Dutch Lady Milk Industries Berhad. In their own names, insiders own RM85m worth of stock in the RM1.9b 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
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dutch Lady Milk Industries 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
Our data indicates that Private Companies hold 52%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Dutch Lady Milk Industries Berhad , and understanding them should be part of your investment process.
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.
