Individual investors invested in Magma Group Berhad (KLSE:MAGMA) up 11% last week, insiders too were rewarded

Key Insights

• Significant control over Magma Group Berhad by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 49% of the company
• Insider ownership in Magma Group Berhad is 33%

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If you want to know who really controls Magma Group Berhad (KLSE:MAGMA), then you'll have to look at the makeup of its share registry. With 50% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 33% cut.

Let's delve deeper into each type of owner of Magma Group Berhad, beginning with the chart below.

Check out our latest analysis for Magma Group Berhad

What Does The Institutional Ownership Tell Us About Magma Group Berhad?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Institutions have a very small stake in Magma Group Berhad. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Magma Group Berhad. From our data, we infer that the largest shareholder is Hock Seng Lee (who also holds the title of Top Key Executive) with 7.2% 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. Skyload Express Sdn Bhd is the second largest shareholder owning 7.1% of common stock, and Hong Im Yew holds about 5.2% of the company stock. Additionally, the company's CEO Chee Liang directly holds 1.9% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Magma Group 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.

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 most recent data indicates that insiders own a reasonable proportion of Magma Group Berhad. Insiders own RM186m worth of shares in the RM572m 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, who are usually individual investors, hold a 50% stake in Magma Group 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

It seems that Private Companies own 12%, of the Magma Group Berhad stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Magma Group Berhad better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Magma Group Berhad (including 3 which are a bit unpleasant) .

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.

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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.