Retail investors in EG Industries Berhad (KLSE:EG) are its biggest bettors, and their bets paid off as stock gained 11% last week

Key Insights

• EG Industries Berhad's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 15 shareholders own 50% of the company
• Insiders own 20% of EG Industries Berhad

To get a sense of who is truly in control of EG Industries Berhad (KLSE:EG), it is important to understand the ownership structure of the business. With 36% stake, retail investors 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.

As a result, retail investors were the biggest beneficiaries of last week’s 11% gain.

In the chart below, we zoom in on the different ownership groups of EG Industries Berhad.

Check out our latest analysis for EG Industries Berhad

What Does The Institutional Ownership Tell Us About EG Industries 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.

EG Industries Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 EG Industries Berhad's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in EG Industries Berhad. Looking at our data, we can see that the largest shareholder is the CEO Pang Kang with 9.0% of shares outstanding. With 6.3% and 4.5% of the shares outstanding respectively, Qyh Capital Sdn. Bhd. and Sem Global Sdn Bhd are the second and third largest shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of EG Industries 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. 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 insiders maintain a significant holding in EG Industries Berhad. It has a market capitalization of just RM1.1b, and insiders have RM208m 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 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over EG Industries Berhad. 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.

Private Company Ownership

Our data indicates that Private Companies hold 21%, of the company's shares. 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:

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. Be aware that EG Industries Berhad is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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.

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