Yahoo Finance With 44% ownership, Kinergy Advancement Berhad (KLSE:KAB) insiders have a lot at stake
Key Insights
Insiders appear to have a vested interest in Kinergy Advancement Berhad's growth, as seen by their sizeable ownership
51% of the business is held by the top 7 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
A look at the shareholders of Kinergy Advancement Berhad (KLSE:KAB) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
Let's delve deeper into each type of owner of Kinergy Advancement Berhad, beginning with the chart below.
Check out our latest analysis for Kinergy Advancement Berhad
What Does The Institutional Ownership Tell Us About Kinergy Advancement 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.
We can see that Kinergy Advancement Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Kinergy Advancement Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Kinergy Advancement Berhad. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Kinergy Advancement Berhad's case, its Senior Key Executive, Keng Lai, is the largest shareholder, holding 24% of shares outstanding. For context, the second largest shareholder holds about 9.2% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder.
On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Kinergy Advancement 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.
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 information suggests that insiders maintain a significant holding in Kinergy Advancement Berhad. Insiders have a RM318m stake in this RM720m business. 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
The general public, who are usually individual investors, hold a 35% stake in Kinergy Advancement 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 13%, of the Kinergy Advancement Berhad stock. 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. For example, we've discovered 2 warning signs for Kinergy Advancement Berhad (1 is a bit unpleasant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.
