Farm Fresh Berhad (KLSE:FFB) most popular amongst private companies who own 58% of the shares, institutions hold 22%
Simply Wall St
5 min read
Key Insights
The considerable ownership by private companies in Farm Fresh Berhad indicates that they collectively have a greater say in management and business strategy
A total of 3 investors have a majority stake in the company with 55% ownership
If you want to know who really controls Farm Fresh Berhad (KLSE:FFB), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 58% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 22% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of Farm Fresh Berhad, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Farm Fresh 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.
Farm Fresh Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Farm Fresh Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:FFB Earnings and Revenue Growth May 27th 2023
Hedge funds don't have many shares in Farm Fresh Berhad. Rainforest Capital Sdn Bhd is currently the largest shareholder, with 31% of shares outstanding. With 13% and 12% of the shares outstanding respectively, Farmchoice Foods Sdn Bhd and Agrifood Resources Holdings Sdn Bhd are the second and third largest shareholders.
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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Farm Fresh 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. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own less than 1% of Farm Fresh Berhad. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just RM2.9b, and the board has only RM2.3m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Farm Fresh 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 58%, of the shares on issue. 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:
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 1 warning sign with Farm Fresh 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.
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