Institutions own 18% of Dutch Lady Milk Industries Berhad (KLSE:DLADY) shares but private companies control 52% of the company
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Dutch Lady Milk Industries Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
Zuivelcooperatie FrieslandCampina U.A. owns 51% of the company
If you want to know who really controls Dutch Lady Milk Industries Berhad (KLSE:DLADY), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 18% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
In the chart below, we zoom in on the different ownership groups of Dutch Lady Milk Industries Berhad.
KLSE:DLADY Ownership Breakdown September 26th 2023
What Does The Institutional Ownership Tell Us About Dutch Lady Milk Industries Berhad?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Dutch Lady Milk Industries 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 Dutch Lady Milk Industries Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:DLADY Earnings and Revenue Growth September 26th 2023
Dutch Lady Milk Industries Berhad is not owned by hedge funds. Zuivelcooperatie FrieslandCampina U.A. is currently the company's largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 9.3% of the shares outstanding, followed by an ownership of 8.5% by the third-largest shareholder.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Dutch Lady Milk Industries 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.
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. As individuals, the insiders collectively own RM43m worth of the RM1.4b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. 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 52%, of the shares on issue. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Dutch Lady Milk Industries Berhad better, we need to consider many other factors. Take risks for example - Dutch Lady Milk Industries Berhad has 2 warning signs we think 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.
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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.
