Sapura Energy Berhad's (KLSE:SAPNRG) 11% loss last week hit both individual investors who own 54% as well as institutions

Key Insights

• Sapura Energy Berhad's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 46% ownership
• Institutions own 42% of Sapura Energy Berhad

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

To get a sense of who is truly in control of Sapura Energy Berhad (KLSE:SAPNRG), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 11% price drop, institutions with their 42% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Sapura Energy Berhad.

See our latest analysis for Sapura Energy Berhad

What Does The Institutional Ownership Tell Us About Sapura Energy 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.

As you can see, institutional investors have a fair amount of stake in Sapura Energy Berhad. 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 Sapura Energy Berhad'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 Sapura Energy Berhad. The company's largest shareholder is Permodalan Nasional Berhad, with ownership of 41%. With 2.6% and 0.4% of the shares outstanding respectively, Climan Sdn. Bhd. and Dimensional Fund Advisors LP are the second and third largest shareholders.

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.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Sapura Energy 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Sapura Energy Berhad. In their own names, insiders own RM7.6m worth of stock in the RM735m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Sapura Energy Berhad, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Sapura Energy Berhad (of which 4 are a bit unpleasant!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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

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.