SAM Engineering & Equipment (M) Berhad (KLSE:SAM) surges 11%; private companies who own 55% shares profited along with institutions

Key Insights

• The considerable ownership by private companies in SAM Engineering & Equipment (M) Berhad indicates that they collectively have a greater say in management and business strategy
• 55% of the company is held by a single shareholder (Accuron Technologies Limited)
• 27% of SAM Engineering & Equipment (M) Berhad is held by Institutions

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

If you want to know who really controls SAM Engineering & Equipment (M) Berhad (KLSE:SAM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 55% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that benefitted the most from last week’s RM271m market cap gain, institutions too had a 27% share in those profits.

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

See 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. 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 SAM Engineering & Equipment (M) Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in SAM Engineering & Equipment (M) Berhad. The company's largest shareholder is Accuron Technologies Limited, with ownership of 55%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 5.7% and 5.5%, 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 SAM Engineering & Equipment (M) Berhad insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just RM2.8b, and the board has only RM7.3m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in SAM Engineering & Equipment (M) Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 55%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.