Top Glove Corporation Bhd.'s (KLSE:TOPGLOV) stock price dropped 5.7% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Top Glove Corporation Bhd indicates that they collectively have a greater say in management and business strategy
• A total of 7 investors have a majority stake in the company with 51% ownership
• Insiders own 30% of Top Glove Corporation Bhd

If you want to know who really controls Top Glove Corporation Bhd. (KLSE:TOPGLOV), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 30% came under pressure after market cap dropped to RM7.3b last week,individual investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Top Glove Corporation Bhd.

View our latest analysis for Top Glove Corporation Bhd

What Does The Institutional Ownership Tell Us About Top Glove Corporation Bhd?

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.

We can see that Top Glove Corporation Bhd does have institutional investors; and they hold a good portion of the company's stock. 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 Top Glove Corporation Bhd, (below). Of course, keep in mind that there are other factors to consider, too.

Top Glove Corporation Bhd is not owned by hedge funds. Our data suggests that Wee Chai Lim, who is also the company's Top Key Executive, holds the most number of shares at 28%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 6.9% and 6.7%, of the shares outstanding, respectively.

We did some more digging and found that 7 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.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Top Glove Corporation Bhd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Top Glove Corporation Bhd.. Insiders own RM2.2b worth of shares in the RM7.3b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 37% 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 8.7%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.