Teladan Setia Group Berhad (KLSE:TELADAN) insiders have significant skin in the game with 87% ownership

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Simply Wall St

Updated Tue, Apr 11, 2023, 6:53 PM 4 min read

Key Insights

Significant insider control over Teladan Setia Group Berhad implies vested interests in company growth
A total of 2 investors have a majority stake in the company with 53% ownership
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Teladan Setia Group Berhad (KLSE:TELADAN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 87% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of Teladan Setia Group Berhad have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

Let's delve deeper into each type of owner of Teladan Setia Group Berhad, beginning with the chart below.

View our latest analysis for Teladan Setia Group Berhad

ownership-breakdown — KLSE:TELADAN Ownership Breakdown April 12th 2023

What Does The Lack Of Institutional Ownership Tell Us About Teladan Setia Group Berhad?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Teladan Setia Group Berhad's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

earnings-and-revenue-growth — KLSE:TELADAN Earnings and Revenue Growth April 12th 2023

Teladan Setia Group Berhad is not owned by hedge funds. The company's CEO Lay Teo is the largest shareholder with 41% of shares outstanding. The second and third largest shareholders are Lay Teo and Siew Teo, with an equal amount of shares to their name at 11%. Interestingly, the third-largest shareholder, Siew Teo is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Teladan Setia 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.

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 most recent data indicates that insiders own the majority of Teladan Setia Group Berhad. This means they can collectively make decisions for the company. So they have a RM876m stake in this RM1.0b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. 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. Case in point: We've spotted 1 warning sign for Teladan Setia Group Berhad you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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