Insiders own 26% of Engtex Group Berhad (KLSE:ENGTEX) shares but private companies control 39% of the company
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Significant control over Engtex Group Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
51% of the business is held by the top 8 shareholders
A look at the shareholders of Engtex Group Berhad (KLSE:ENGTEX) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And individual insiders on the other hand have a 26% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about Engtex Group Berhad.
What Does The Institutional Ownership Tell Us About Engtex Group 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.
Engtex Group Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Engtex Group Berhad's earnings history below. Of course, the future is what really matters.
KLSE:ENGTEX Earnings and Revenue Growth July 24th 2024
We note that hedge funds don't have a meaningful investment in Engtex Group Berhad. The company's largest shareholder is Nh Holdings Sdn Bhd, with ownership of 25%. In comparison, the second and third largest shareholders hold about 5.7% and 4.5% of the stock. Chooi Ng, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Engtex Group Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 insiders own a significant proportion of Engtex Group Berhad. Insiders have a RM135m stake in this RM511m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Engtex Group 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
We can see that Private Companies own 39%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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 Engtex Group 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.
