Private companies among DRB-HICOM Berhad's (KLSE:DRBHCOM) largest shareholders, saw gain in holdings value after stock jumped 12% last week

Key Insights

• The considerable ownership by private companies in DRB-HICOM Berhad indicates that they collectively have a greater say in management and business strategy
• Etika Strategi Sdn. Bhd. owns 56% of the company
• Institutional ownership in DRB-HICOM Berhad is 19%

To get a sense of who is truly in control of DRB-HICOM Berhad (KLSE:DRBHCOM), 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 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit RM2.2b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of DRB-HICOM Berhad, beginning with the chart below.

View our latest analysis for DRB-HICOM Berhad

What Does The Institutional Ownership Tell Us About DRB-HICOM Berhad?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in DRB-HICOM 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at DRB-HICOM Berhad's earnings history below. Of course, the future is what really matters.

DRB-HICOM Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Etika Strategi Sdn. Bhd. with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 7.5% and 3.7%, of the shares outstanding, respectively.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of DRB-HICOM 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.

We can report that insiders do own shares in DRB-HICOM Berhad. It has a market capitalization of just RM2.2b, and insiders have RM22m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in DRB-HICOM Berhad. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 57%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for DRB-HICOM Berhad that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for 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.