How Much Of PJBumi Berhad (KLSE:PJBUMI) Do Insiders Own?

Every investor in PJBumi Berhad (KLSE:PJBUMI) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.

PJBumi Berhad is a smaller company with a market capitalization of RM14m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about PJBumi Berhad.

See our latest analysis for PJBumi Berhad

KLSE:PJBUMI Ownership Summary, February 11th 2020
KLSE:PJBUMI Ownership Summary, February 11th 2020

What Does The Institutional Ownership Tell Us About PJBumi 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.

As you can see, institutional investors own 7.5% of PJBumi Berhad. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of PJBumi Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

KLSE:PJBUMI Income Statement, February 11th 2020
KLSE:PJBUMI Income Statement, February 11th 2020

PJBumi Berhad is not owned by hedge funds. Our data shows that Lira Mewah Sdn. Bhd is the largest shareholder with 18% of shares outstanding. Next, we have Panama Ventures Sdn Bhd and Tanjung Setara Sdn Bhd as the second and third largest shareholders, holding 15% and 13%, of the shares outstanding, respectively.

On studying the facts and figures more closely, we found that the top 4 shareholders control 58% of the company which implies that this group has considerable sway over the company’s decision-making.

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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of PJBumi 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of PJBumi Berhad. Insiders own RM2.2m worth of shares in the RM14m company. 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

The general public holds a 18% stake in PJBUMI. 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 59%, 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:

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 example, we’ve discovered 4 warning signs for PJBumi Berhad (2 are a bit concerning!) that you should be aware of before investing here.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.