AEON Credit Service (M) Berhad's (KLSE:AEONCR) market cap dropped RM245m last week; individual investors who hold 63% were hit as were institutions

Key Insights

• Significant control over AEON Credit Service (M) Berhad by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is AEON Financial Service Co., Ltd. with a 62% stake
• 24% of AEON Credit Service (M) Berhad is held by Institutions

A look at the shareholders of AEON Credit Service (M) Berhad (KLSE:AEONCR) can tell us which group is most powerful. The group holding the most number of shares in the company, around 63% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 7.6% decrease in the stock price last week, public companies suffered the most losses, but institutions who own 24% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about AEON Credit Service (M) Berhad.

See our latest analysis for AEON Credit Service (M) Berhad

What Does The Institutional Ownership Tell Us About AEON Credit Service (M) 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.

We can see that AEON Credit Service (M) Berhad does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of AEON Credit Service (M) Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in AEON Credit Service (M) Berhad. AEON Financial Service Co., Ltd. is currently the largest shareholder, with 62% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 5.1% and 3.9%, of the shares outstanding, respectively.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of AEON Credit Service (M) Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own less than 1% of AEON Credit Service (M) Berhad. It appears that the board holds about RM20m worth of stock. This compares to a market capitalization of RM3.0b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over AEON Credit Service (M) 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.

Public Company Ownership

We can see that public companies hold 63% of the AEON Credit Service (M) Berhad shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that AEON Credit Service (M) Berhad is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.