Muhibbah Engineering (M) Bhd.'s (KLSE:MUHIBAH) top owners are retail investors with 44% stake, while 31% is held by insiders
Simply Wall St
4 min read
Key Insights
Significant control over Muhibbah Engineering (M) Bhd by retail investors implies that the general public has more power to influence management and governance-related decisions
To get a sense of who is truly in control of Muhibbah Engineering (M) Bhd. (KLSE:MUHIBAH), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual insiders make up 31% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Muhibbah Engineering (M) Bhd.
What Does The Institutional Ownership Tell Us About Muhibbah Engineering (M) Bhd?
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.
Muhibbah Engineering (M) Bhd 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. 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 Muhibbah Engineering (M) Bhd's earnings history below. Of course, the future is what really matters.
KLSE:MUHIBAH Earnings and Revenue Growth July 31st 2023
Hedge funds don't have many shares in Muhibbah Engineering (M) Bhd. With a 20% stake, CEO Ngan Mac is the largest shareholder. For context, the second largest shareholder holds about 5.5% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder.
A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Muhibbah Engineering (M) Bhd
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our information suggests that insiders maintain a significant holding in Muhibbah Engineering (M) Bhd.. Insiders have a RM155m stake in this RM493m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 4.9%, of the Muhibbah Engineering (M) Bhd stock. 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.
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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