While institutions invested in SMRT Holdings Berhad (KLSE:SMRT) benefited from last week's 14% gain, private companies stood to gain the most

Key Insights

• Significant control over SMRT Holdings Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 54% ownership
• 18% of SMRT Holdings Berhad is held by insiders

Every investor in SMRT Holdings Berhad (KLSE:SMRT) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While private companies were the group that reaped the most benefits after last week’s 14% price gain, institutions also received a 27% cut.

Let's take a closer look to see what the different types of shareholders can tell us about SMRT Holdings Berhad.

View our latest analysis for SMRT Holdings Berhad

What Does The Institutional Ownership Tell Us About SMRT Holdings 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.

SMRT Holdings Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 SMRT Holdings Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

SMRT Holdings Berhad is not owned by hedge funds. Our data shows that Special Flagship Holdings Sdn Bhd is the largest shareholder with 16% of shares outstanding. R. Ramanathan Chettiar is the second largest shareholder owning 13% of common stock, and Urusharta Jamaah Sdn Bhd holds about 8.5% of the company stock. Furthermore, CEO Maha Palan is the owner of 0.7% of the company's shares.

We did some more digging and found that 6 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of SMRT Holdings Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 insiders maintain a significant holding in SMRT Holdings Berhad. Insiders own RM95m worth of shares in the RM521m 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-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. 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 35%, of the company's shares. 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for SMRT Holdings Berhad you should know about.

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.

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