Do Insiders Own Lots Of Shares In British American Tobacco (Malaysia) Berhad (KLSE:BAT)?

If you want to know who really controls British American Tobacco (Malaysia) Berhad (KLSE:BAT), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

British American Tobacco (Malaysia) Berhad isn't enormous, but it's not particularly small either. It has a market capitalization of RM3.9b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about British American Tobacco (Malaysia) Berhad.

See our latest analysis for British American Tobacco (Malaysia) Berhad

What Does The Institutional Ownership Tell Us About British American Tobacco (Malaysia) Berhad?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

British American Tobacco (Malaysia) 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 British American Tobacco (Malaysia) 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 British American Tobacco (Malaysia) Berhad. Looking at our data, we can see that the largest shareholder is British American Tobacco Holdings Malaysia B V with 50% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Lazard Asset Management LLC is the second largest shareholder owning 4.6% of common stock, and Eastspring Investments (Singapore) Limited holds about 1.7% of the company stock.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of British American Tobacco (Malaysia) 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.

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.

I can report that insiders do own shares in British American Tobacco (Malaysia) Berhad. It has a market capitalization of just RM3.9b, and insiders have RM210m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 27% stake in the company, will not 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

It seems that Private Companies own 51%, of the British American Tobacco (Malaysia) Berhad stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand British American Tobacco (Malaysia) Berhad better, we need to consider many other factors. For example, we've discovered 2 warning signs for British American Tobacco (Malaysia) Berhad (1 is concerning!) that you should be aware of before investing here.

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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