Owning 70% in ViTrox Corporation Berhad (KLSE:VITROX) means that insiders are heavily invested in the company's future

editorial-team@simplywallst.com (Simply Wall St)

Tue, Oct 17, 2023, 1:23 AM 4 min read

Key Insights

Insiders appear to have a vested interest in ViTrox Corporation Berhad's growth, as seen by their sizeable ownership
The top 3 shareholders own 56% of the company
Institutions own 13% of ViTrox Corporation Berhad

If you want to know who really controls ViTrox Corporation Berhad (KLSE:VITROX), then you'll have to look at the makeup of its share registry. With 70% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of ViTrox Corporation Berhad, beginning with the chart below.

View our latest analysis for ViTrox Corporation Berhad

ownership-breakdown — KLSE:VITROX Ownership Breakdown October 17th 2023

What Does The Institutional Ownership Tell Us About ViTrox Corporation 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 ViTrox Corporation Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. 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 ViTrox Corporation Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:VITROX Earnings and Revenue Growth October 17th 2023

ViTrox Corporation Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jenn Chu with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 10% of the stock. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top 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.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of ViTrox Corporation Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders own more than half of ViTrox Corporation Berhad. This gives them effective control of the company. That means insiders have a very meaningful RM4.7b stake in this RM6.7b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in ViTrox Corporation 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.