Dufu Technology Corp. Berhad's (KLSE:DUFU): Top Key Executive Hui-Ta Lee is the most bullish insider, and their stock value gained 13% last week

Key Insights

• Insiders appear to have a vested interest in Dufu Technology Berhad's growth, as seen by their sizeable ownership
• A total of 7 investors have a majority stake in the company with 54% ownership
• 22% of Dufu Technology Berhad is held by Institutions

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Every investor in Dufu Technology Corp. Berhad (KLSE:DUFU) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 37% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 13% gain.

In the chart below, we zoom in on the different ownership groups of Dufu Technology Berhad.

Check out our latest analysis for Dufu Technology Berhad

What Does The Institutional Ownership Tell Us About Dufu Technology 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 Dufu Technology 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. 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 Dufu Technology Berhad's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Dufu Technology Berhad. From our data, we infer that the largest shareholder is Hui-Ta Lee (who also holds the title of Top Key Executive) with 21% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Perfect Commerce Sdn Bhd is the second largest shareholder owning 9.1% of common stock, and Keng Thye Ooi holds about 6.0% of the company stock.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Dufu Technology Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Dufu Technology Corp. Berhad. It has a market capitalization of just RM1.0b, and insiders have RM389m worth of shares in their own names. 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 30% stake in Dufu Technology Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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 instance, we've identified 2 warning signs for Dufu Technology Berhad (1 is a bit unpleasant) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.