Southern Acids (M) Berhad's (KLSE:SAB) top owners are private companies with 58% stake, while 16% is held by insiders

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

Thu, Apr 11, 2024, 9:27 PM 4 min read

Key Insights

Southern Acids (M) Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 3 shareholders own 51% of the company
16% of Southern Acids (M) Berhad is held by insiders

Every investor in Southern Acids (M) Berhad (KLSE:SAB) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual insiders, on the other hand, account for 16% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

In the chart below, we zoom in on the different ownership groups of Southern Acids (M) Berhad.

See our latest analysis for Southern Acids (M) Berhad

ownership-breakdown — KLSE:SAB Ownership Breakdown April 12th 2024

What Does The Institutional Ownership Tell Us About Southern Acids (M) 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.

Southern Acids (M) 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. 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 Southern Acids (M) Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — KLSE:SAB Earnings and Revenue Growth April 12th 2024

Southern Acids (M) Berhad is not owned by hedge funds. The company's largest shareholder is Southern Palm Industries Sdn Bhd, with ownership of 31%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Southern Acids (M) 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.

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 most recent data indicates that insiders own a reasonable proportion of Southern Acids (M) Berhad. It has a market capitalization of just RM479m, and insiders have RM79m worth of shares in their own names. 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

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Southern Acids (M) 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

Our data indicates that Private Companies hold 58%, of the company's shares. 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:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.