Kossan Rubber Industries Bhd's (KLSE:KOSSAN) 5.1% loss last week hit both individual investors who own 36% as well as institutions

Key Insights

• The considerable ownership by private companies in Kossan Rubber Industries Bhd indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 5 shareholders
• Insider ownership in Kossan Rubber Industries Bhd is 14%

Our free stock report includes 1 warning sign investors should be aware of before investing in Kossan Rubber Industries Bhd. Read for free now.

If you want to know who really controls Kossan Rubber Industries Bhd (KLSE:KOSSAN), then you'll have to look at the makeup of its share registry. With 36% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.1% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 29% stock also took a hit.

Let's delve deeper into each type of owner of Kossan Rubber Industries Bhd, beginning with the chart below.

See our latest analysis for Kossan Rubber Industries Bhd

What Does The Institutional Ownership Tell Us About Kossan Rubber Industries Bhd?

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.

Kossan Rubber Industries Bhd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kossan Rubber Industries Bhd, (below). Of course, keep in mind that there are other factors to consider, too.

Kossan Rubber Industries Bhd is not owned by hedge funds. Kossan Holdings (M) Sdn Bhd is currently the largest shareholder, with 35% of shares outstanding. With 5.7% and 5.6% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Aberdeen Group Plc are the second and third largest shareholders. In addition, we found that Kuang Sia Lim, the CEO has 2.8% of the shares allocated to their name.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Kossan Rubber Industries Bhd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders maintain a significant holding in Kossan Rubber Industries Bhd. Insiders have a RM597m stake in this RM4.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kossan Rubber Industries Bhd. 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

It seems that Private Companies own 36%, of the Kossan Rubber Industries Bhd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Kossan Rubber Industries Bhd you should be aware of.

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.

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.