Naim Holdings Berhad's (KLSE:NAIM) market cap rose RM80m last week; private companies who hold 43% profited and so did insiders

Key Insights

• The considerable ownership by private companies in Naim Holdings Berhad indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 59% of the company
• 28% of Naim Holdings Berhad is held by insiders

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Every investor in Naim Holdings Berhad (KLSE:NAIM) should be aware of the most powerful shareholder groups. With 43% 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.

Private companies gained the most after market cap touched RM461m last week, while insiders who own 28% also benefitted.

Let's delve deeper into each type of owner of Naim Holdings Berhad, beginning with the chart below.

Check out our latest analysis for Naim Holdings Berhad

What Does The Institutional Ownership Tell Us About Naim Holdings 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.

We can see that Naim Holdings Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Naim Holdings Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Naim Holdings Berhad. Island Harvests Sdn. Bhd. is currently the company's largest shareholder with 20% of shares outstanding. With 14% and 13% of the shares outstanding respectively, Tapak Beringin Sdn. Bhd and Abdul Bin Sepawi are the second and third largest shareholders. Abdul Bin Sepawi, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Hasmi Bin Hasnan is the owner of 11% of the company's shares.

Our research also brought to light the fact that roughly 59% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Naim Holdings 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. 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.

Our information suggests that insiders maintain a significant holding in Naim Holdings Berhad. It has a market capitalization of just RM461m, and insiders have RM131m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Naim Holdings 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 43%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Naim Holdings Berhad better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.