While state or government own 25% of Far East Holdings Berhad (KLSE:FAREAST), private companies are its largest shareholders with 55% ownership
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Far East Holdings Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
If you want to know who really controls Far East Holdings Berhad (KLSE:FAREAST), then you'll have to look at the makeup of its share registry. With 55% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, state or government make up 25% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Far East Holdings Berhad.
KLSE:FAREAST Ownership Breakdown October 11th 2024
What Does The Lack Of Institutional Ownership Tell Us About Far East Holdings Berhad?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Far East Holdings Berhad might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
KLSE:FAREAST Earnings and Revenue Growth October 11th 2024
Hedge funds don't have many shares in Far East Holdings Berhad. Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang is currently the company's largest shareholder with 25% of shares outstanding. For context, the second largest shareholder holds about 24% of the shares outstanding, followed by an ownership of 9.1% by the third-largest shareholder.
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. 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 Far East Holdings 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.
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.
We can see that insiders own shares in Far East Holdings Berhad. As individuals, the insiders collectively own RM199m worth of the RM2.1b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Far East Holdings 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
It seems that Private Companies own 55%, of the Far East Holdings Berhad stock. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Far East Holdings Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Far East Holdings Berhad you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist 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.
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.
