While individual investors own 29% of Widad Group Berhad (KLSE:WIDAD), private companies are its largest shareholders with 54% ownership
Simply Wall St
4 min read
To get a sense of who is truly in control of Widad Group Berhad (KLSE:WIDAD), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Individual investors, on the other hand, account for 29% of the company's stockholders.
Let's take a closer look to see what the different types of shareholders can tell us about Widad Group Berhad.
What Does The Lack Of Institutional Ownership Tell Us About Widad Group Berhad?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Widad Group Berhad might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
KLSE:WIDAD Earnings and Revenue Growth November 2nd 2022
We note that hedge funds don't have a meaningful investment in Widad Group Berhad. Our data shows that Widad Business Group Sdn Bhd is the largest shareholder with 45% of shares outstanding. Muhammad Ikmal Bin Abdullah is the second largest shareholder owning 5.6% of common stock, and Pertubuhan Keselamatan Sosial holds about 4.3% of the company stock. Furthermore, CEO Mohd bin Mohd Jaafar is the owner of 1.0% of the company's shares.
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.
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 Widad Group Berhad
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Widad Group Berhad. It has a market capitalization of just RM1.1b, and insiders have RM135m 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 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Widad Group Berhad. 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
Our data indicates that Private Companies hold 54%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
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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