Could The Rimbunan Sawit Berhad (KLSE:RSAWIT) Ownership Structure Tell Us Something Useful?

The big shareholder groups in Rimbunan Sawit Berhad (KLSE:RSAWIT) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

Rimbunan Sawit Berhad is not a large company by global standards. It has a market capitalization of RM748m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Rimbunan Sawit Berhad.

View our latest analysis for Rimbunan Sawit Berhad

What Does The Lack Of Institutional Ownership Tell Us About Rimbunan Sawit Berhad?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Rimbunan Sawit Berhad, for yourself, below.

Rimbunan Sawit Berhad is not owned by hedge funds. Our data shows that Pemandangan Jauh Plantation Sdn Bhd is the largest shareholder with 21% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 4.9%, of the shares outstanding, respectively.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Rimbunan Sawit Berhad

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.

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 Rimbunan Sawit Berhad. It has a market capitalization of just RM748m, and insiders have RM49m worth of shares, in their own names. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 40% ownership, the general public have some degree of sway over Rimbunan Sawit Berhad. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 47%, 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.

Public Company Ownership

We can see that public companies hold 3.1% of the Rimbunan Sawit Berhad shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Rimbunan Sawit Berhad better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Rimbunan Sawit Berhad (of which 1 doesn't sit too well with us!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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