Private companies are NCT Alliance Berhad's (KLSE:NCT) biggest owners and were rewarded after market cap rose by RM51m last week

Key Insights

• The considerable ownership by private companies in NCT Alliance Berhad indicates that they collectively have a greater say in management and business strategy
• 53% of the company is held by a single shareholder (YBG Yap Consolidated Sdn. Bhd.)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of NCT Alliance Berhad (KLSE:NCT) can tell us which group is most powerful. With 55% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 12% gain.

In the chart below, we zoom in on the different ownership groups of NCT Alliance Berhad.

Check out our latest analysis for NCT Alliance Berhad

What Does The Institutional Ownership Tell Us About NCT Alliance 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 NCT Alliance 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. 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 NCT Alliance Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

NCT Alliance Berhad is not owned by hedge funds. The company's largest shareholder is YBG Yap Consolidated Sdn. Bhd., with ownership of 53%. 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 4.9% and 1.6%, of the shares outstanding, respectively. In addition, we found that Ngan Yap, the CEO has 0.9% of the shares allocated to their name.

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 NCT Alliance 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.

We can report that insiders do own shares in NCT Alliance Berhad. In their own names, insiders own RM35m worth of stock in the RM488m 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 30% stake in NCT Alliance 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 55%, 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.

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. For example, we've discovered 1 warning sign for NCT Alliance Berhad that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.