Could The Advanced Packaging Technology (M) Bhd (KLSE:ADVPKG) Ownership Structure Tell Us Something Useful?

A look at the shareholders of Advanced Packaging Technology (M) Bhd (KLSE:ADVPKG) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of RM36m, Advanced Packaging Technology (M) Bhd is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholder can tell us about Advanced Packaging Technology (M) Bhd.

View our latest analysis for Advanced Packaging Technology (M) Bhd

What Does The Lack Of Institutional Ownership Tell Us About Advanced Packaging Technology (M) Bhd?

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. Advanced Packaging Technology (M) Bhd might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Advanced Packaging Technology (M) Bhd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Brilliant Smart International Limited with 8.5% of shares outstanding. Chong Yong Pang is the second largest shareholder with 8.3% of common stock, followed by Ee Kong Ling, holding 5.7% of the stock.

Further, we can found that 51% of the ownership is controlled by the top 12 shareholders, meaning that no one shareholder has a majority interest in the ownership.

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. 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 Advanced Packaging Technology (M) 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 that insiders own more than half the Advanced Packaging Technology (M) Bhd stock. This gives them a lot of power. So they have a RM25m stake in this RM36m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 22% ownership, the general public have some degree of sway over ADVPKG. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 8.5%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 2 warning signs for Advanced Packaging Technology (M) Bhd that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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