Hextar Global Berhad's (KLSE:HEXTAR) stock price dropped 6.8% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Hextar Global Berhad indicates that they collectively have a greater say in management and business strategy
• Hextar Holdings Sdn Bhd owns 54% of the company
• Insiders own 18% of Hextar Global Berhad

A look at the shareholders of Hextar Global Berhad (KLSE:HEXTAR) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 6.8%.

In the chart below, we zoom in on the different ownership groups of Hextar Global Berhad.

Check out our latest analysis for Hextar Global Berhad

What Does The Institutional Ownership Tell Us About Hextar Global Berhad?

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.

Hextar Global Berhad 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 Hextar Global Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hextar Global Berhad is not owned by hedge funds. Hextar Holdings Sdn Bhd is currently the largest shareholder, with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 9.1% and 4.0% of the shares outstanding respectively, Choo Meng Ong and Haw Choon Chiau are the second and third largest shareholders. Choo Meng Ong, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Hextar Global Berhad

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

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 Hextar Global Berhad. It has a market capitalization of just RM3.4b, and insiders have RM613m 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hextar Global 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

We can see that Private Companies own 54%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hextar Global Berhad better, we need to consider many other factors. For instance, we've identified 2 warning signs for Hextar Global Berhad that you should be aware of.

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.

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.