Institutions along with private companies who hold considerable shares inSAM Engineering & Equipment (M) Berhad (KLSE:SAM) come under pressure; lose 8.6% of holdings value

Key Insights

• SAM Engineering & Equipment (M) Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Accuron Technologies Limited owns 55% of the company
• 27% of SAM Engineering & Equipment (M) Berhad is held by Institutions

Every investor in SAM Engineering & Equipment (M) Berhad (KLSE:SAM) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 27% shares weren’t spared from last week’s RM244m market cap drop, private companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of SAM Engineering & Equipment (M) Berhad.

View our latest analysis for SAM Engineering & Equipment (M) Berhad

What Does The Institutional Ownership Tell Us About SAM Engineering & Equipment (M) Berhad?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

SAM Engineering & Equipment (M) 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. 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 SAM Engineering & Equipment (M) Berhad's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SAM Engineering & Equipment (M) Berhad. Looking at our data, we can see that the largest shareholder is Accuron Technologies Limited with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 6.4% and 5.3%, of the shares outstanding, respectively.

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

Insider Ownership Of SAM Engineering & Equipment (M) 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.

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.

Our information suggests that SAM Engineering & Equipment (M) Berhad insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than RM3.6m worth of shares in the RM2.6b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SAM Engineering & Equipment (M) 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 55%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for SAM Engineering & Equipment (M) Berhad you should know about.

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.