RGB International Bhd. (KLSE:RGB) CEO Kim Chuah, the company's largest shareholder sees 15% reduction in holdings value

Key Insights

• Significant insider control over RGB International Bhd implies vested interests in company growth
• The top 15 shareholders own 50% of the company
• Institutions own 12% of RGB International Bhd

Every investor in RGB International Bhd. (KLSE:RGB) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to RM586m last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of RGB International Bhd, beginning with the chart below.

Check out our latest analysis for RGB International Bhd

What Does The Institutional Ownership Tell Us About RGB International Bhd?

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.

We can see that RGB International Bhd does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see RGB International Bhd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in RGB International Bhd. With a 31% stake, CEO Kim Chuah is the largest shareholder. In comparison, the second and third largest shareholders hold about 2.4% and 2.3% of the stock. Interestingly, the second-largest shareholder, Mazlan Bin Ismail is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of RGB International Bhd

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. 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.

It seems insiders own a significant proportion of RGB International Bhd.. Insiders own RM252m worth of shares in the RM586m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with RGB International Bhd .

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.