Malaysia Smelting Corporation Berhad's (KLSE:MSC) biggest owners are private companies who got richer after stock soared 12% last week

Key Insights

• Significant control over Malaysia Smelting Corporation Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
• Tan Chin Tuan Pte Ltd owns 52% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Malaysia Smelting Corporation Berhad (KLSE:MSC), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by RM118m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Malaysia Smelting Corporation Berhad.

View our latest analysis for Malaysia Smelting Corporation Berhad

What Does The Institutional Ownership Tell Us About Malaysia Smelting Corporation 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.

We can see that Malaysia Smelting Corporation Berhad does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Malaysia Smelting Corporation Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Malaysia Smelting Corporation Berhad is not owned by hedge funds. Tan Chin Tuan Pte Ltd is currently the largest shareholder, with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 1.3% and 1.2%, of the shares outstanding, respectively.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Malaysia Smelting Corporation 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Malaysia Smelting Corporation Berhad. In their own names, insiders own RM78m worth of stock in the RM1.1b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Malaysia Smelting Corporation Berhad. 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 53%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Malaysia Smelting Corporation Berhad better, we need to consider many other factors. Be aware that Malaysia Smelting Corporation Berhad is showing 1 warning sign in our investment analysis , you should know about...

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.