Key Insights
Investors in Magni-Tech Industries Berhad ( KLSE:MAGNI ) should be aware of the most powerful shareholder groups. With a 45% stake, individual insiders have the largest stake in the company which means if the share price rises, this group will stand to gain the most (and lose the most if the share price falls).
As such, any decisions made by Magni-Tech Industries Berhad insiders regarding the company's future will be crucial for the company.
Let's take a closer look to see what the different types of shareholders can tell us about Magni-Tech Industries Berhad.
Check out our latest analysis for Magni-Tech Industries Berhad
Ownership Breakdown
What does institutional ownership tell us about Magni-Tech Industries Berhad?
Institutions typically compare their own performance against a benchmark when reporting to their own investors, so when a stock is included in a major index, they often increase their interest in that stock. You can expect most companies to have some institutional investors on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Magni-Tech Industries Berhad. This means that the analysts working for these institutions have looked at the stock and they like it. However, just like everyone else, the analysts can be wrong. When multiple institutions own a stock, there's always a risk that you may end up in a 'crowded trade'. If such a trade goes wrong, multiple parties could compete to sell shares fast. This risk is higher in companies without a history of growth. You can see Magni-Tech Industries Berhad's historic earnings and revenue below, but remember there's always more to the story.
Revenue and income growth
We note that hedge funds don't have a significant investment in MagniTech Industries Berhad. The CEO, Poai Tan, is the largest shareholder with 29% of the shares, while the second and third largest shareholders hold 13% and 6.9% of the shares outstanding respectively. Interestingly, the third largest shareholder, Kok Tan, also serves as the Chairman of the Board, which also indicates strong insider ownership amongst the company's large shareholders.
Our research also uncovered the fact that about 56% of the company is controlled by the top 4 shareholders, suggesting that these owners have considerable influence over the business.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. There is analyst coverage of the stock, which may become better known over time.
The story continues
Insider Ownership at Magnitech Industries Berhad
The definition of an insider varies slightly from country to country, but members of the board of directors always qualify. Company management should report to the board and the board should represent the interests of shareholders. Notably, top-level managers may themselves be board members.
Insider ownership can be a positive if it signals management 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, which can be a negative in some circumstances.
Our information indicates that insiders hold a significant amount of shares in Magni-Tech Industries Berhad. Insiders own RM421m worth of shares in a RM945m company. It's great to see insiders so invested in the business, it might be worth checking if they've been buying recently.
General public property
The general public, usually retail investors, hold 23% of MagniTech Industries Berhad's shares, and while this size of ownership may not be enough to tilt policy decisions in their favour, they can still collectively influence company policies.
Private Ownership
It appears that 21% of Magni-Tech Industries Berhad is owned by private companies, which is probably worth investigating further. If related parties (such as insiders) have interests in these private companies, they should disclose this in the annual report. In some cases, private companies may have a strategic interest in the company.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important… Be aware that Magni-Tech Industries Berhad is showing 2 warning signs in our investment analysis, and 1 of them is significant…
If you would like to find out what analysts are predicting about future growth then do not miss this free report on analyst forecasts.
Note: The figures in this article are calculated using data from the last 12 months, which refers to the 12-month period ending on the last day of the month in which the financial statements are dated, which may not match the figures in the annual report.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
