Could The Scanwolf Corporation Berhad (KLSE:SCNWOLF) Ownership Structure Tell Us Something Useful?

Every investor in Scanwolf Corporation Berhad (KLSE:SCNWOLF) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

Scanwolf Corporation Berhad is not a large company by global standards. It has a market capitalization of RM25m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutions don’t own shares in the company. Let’s delve deeper into each type of owner, to discover more about Scanwolf Corporation Berhad.

View our latest analysis for Scanwolf Corporation Berhad

KLSE:SCNWOLF Ownership Summary, January 14th 2020
KLSE:SCNWOLF Ownership Summary, January 14th 2020

What Does The Lack Of Institutional Ownership Tell Us About Scanwolf Corporation Berhad?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Scanwolf Corporation Berhad might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

KLSE:SCNWOLF Income Statement, January 14th 2020
KLSE:SCNWOLF Income Statement, January 14th 2020

Hedge funds don’t have many shares in Scanwolf Corporation Berhad. From our data, we infer that the largest shareholder is Bin Loo (who also holds the title of Senior Key Executive) with 10% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider play the role of a key stakeholder. Next, we have Long Ging Yii and King Ti Wong as the second and third largest shareholders, holding 8.6% and 7.3%, of the shares outstanding, respectively.

We also observed that the top 10 shareholders account for 52% of the register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Scanwolf Corporation Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Scanwolf Corporation Berhad. This gives them effective control of the company. That means they own RM19m worth of shares in the RM25m company. That’s quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 26% ownership, the general public have some degree of sway over SCNWOLF. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Scanwolf Corporation Berhad better, we need to consider many other factors. For instance, we’ve identified 4 warning signs for Scanwolf Corporation Berhad (2 shouldn’t be ignored) that you should be aware of.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

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