Institutional investors control 41% of Gamuda Berhad (KLSE:GAMUDA) and were rewarded last week after stock increased 4.0%

Key Insights

• Given the large stake in the stock by institutions, Gamuda Berhad's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 11 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Gamuda Berhad (KLSE:GAMUDA), then you'll have to look at the makeup of its share registry. With 41% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 4.0% last week. The one-year return on investment is currently 97% 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.

Check out our latest analysis for Gamuda Berhad

What Does The Institutional Ownership Tell Us About Gamuda 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.

Gamuda Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Gamuda Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

Gamuda Berhad is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Permodalan Nasional Berhad with 15% of shares outstanding. Employees Provident Fund of Malaysia is the second largest shareholder owning 9.1% of common stock, and Eleena Binti Almarhum Sultan Muhibbuddin Shah Al-Maghfur-lah holds about 4.1% of the company stock. 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. Additionally, the company's CEO Yun Lin directly holds 2.9% of the total shares outstanding.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 Gamuda 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Gamuda Berhad. This is a big company, so it is good to see this level of alignment. Insiders own RM2.4b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gamuda 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.

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. Take risks for example - Gamuda Berhad has 3 warning signs we think 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.