Gamuda Berhad's (KLSE:GAMUDA) high institutional ownership speaks for itself as stock continues to impress, up 10% over last week

Key Insights

• Institutions' substantial holdings in Gamuda Berhad implies that they have significant influence over the company's share price
• A total of 14 investors have a majority stake in the company with 50% ownership
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

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Every investor in Gamuda Berhad (KLSE:GAMUDA) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained RM2.4b in market cap last week. The one-year return on investment is currently 66% and last week's gain would have been more than welcomed.

Let's take a closer look to see what the different types of shareholders can tell us about Gamuda Berhad.

View our latest analysis for Gamuda Berhad

What Does The Institutional Ownership Tell Us About Gamuda Berhad?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Gamuda Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Gamuda Berhad's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Gamuda Berhad. Looking at our data, we can see that the largest shareholder is Employees Provident Fund of Malaysia with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.4% and 4.1%, of the shares outstanding, respectively. Eleena Binti Almarhum Sultan Muhibbuddin Shah Al-Maghfur-lah, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Yun Lin is the owner of 2.8% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of Gamuda Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our most recent data indicates that insiders own some shares in Gamuda Berhad. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around RM2.3b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Gamuda 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.

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 Gamuda Berhad that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.