Teo Seng Capital Berhad's (KLSE:TEOSENG) last week's 11% decline must have disappointed private companies who have a significant stake

Key Insights

• Significant control over Teo Seng Capital Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Leong Hup Holdings Bhd with a 53% stake
• 12% of Teo Seng Capital Berhad is held by insiders

Every investor in Teo Seng Capital Berhad (KLSE:TEOSENG) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 11%.

In the chart below, we zoom in on the different ownership groups of Teo Seng Capital Berhad.

View our latest analysis for Teo Seng Capital Berhad

What Does The Institutional Ownership Tell Us About Teo Seng Capital 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.

Institutions have a very small stake in Teo Seng Capital Berhad. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Teo Seng Capital Berhad. The company's largest shareholder is Leong Hup Holdings Bhd, with ownership of 53%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Emerging Glory Sdn. Bhd. is the second largest shareholder owning 2.4% of common stock, and Eng Lau holds about 1.5% of the company stock.

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 Teo Seng Capital 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. 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.

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.

Our information suggests that insiders maintain a significant holding in Teo Seng Capital Berhad. It has a market capitalization of just RM590m, and insiders have RM69m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 56%, of the shares on issue. 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. Be aware that Teo Seng Capital Berhad is showing 2 warning signs in our investment analysis , and 1 of those is 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.