Key Insights

• Institutions' substantial holdings in Telekom Malaysia Berhad implies that they have significant influence over the company's share price

• 57% of the business is held by the top 4 shareholders

• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Telekom Malaysia Berhad (KLSE:TM) should be aware of the most powerful shareholder groups. With 41% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Telekom Malaysia Berhad.

See our latest analysis for Telekom Malaysia Berhad

What Does The Institutional Ownership Tell Us About Telekom Malaysia 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.

As you can see, institutional investors have a fair amount of stake in Telekom Malaysia Berhad. 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 Telekom Malaysia Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Telekom Malaysia Berhad. Our data shows that Khazanah Nasional Berhad is the largest shareholder with 20% of shares outstanding. Employees Provident Fund of Malaysia is the second largest shareholder owning 16% of common stock, and Permodalan Nasional Berhad holds about 12% of the company stock.

Our research also brought to light the fact that roughly 57% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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