Private companies are DRB-HICOM Berhad's (KLSE:DRBHCOM) biggest owners and were hit after market cap dropped RM232m

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
• 19% of DRB-HICOM Berhad is held by Institutions

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

If you want to know who really controls DRB-HICOM Berhad (KLSE:DRBHCOM), then you'll have to look at the makeup of its share registry. With 57% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 9.4%.

In the chart below, we zoom in on the different ownership groups of DRB-HICOM Berhad.

Check out 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.

Hedge funds don't have many shares in DRB-HICOM Berhad. The company's largest shareholder is Etika Strategi Sdn. Bhd., with ownership of 56%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 8.3% and 3.7% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Lembaga Tabung Haji are the second and third largest shareholders.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of DRB-HICOM Berhad

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in DRB-HICOM Berhad. It has a market capitalization of just RM2.2b, and insiders have RM28m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. 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 57%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand DRB-HICOM Berhad better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for DRB-HICOM Berhad 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.

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.