What Kind Of Shareholders Hold The Majority In P.A. Resources Berhad's (KLSE:PA) Shares?

Every investor in P.A. Resources Berhad (KLSE:PA) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

P.A. Resources Berhad is a smaller company with a market capitalization of RM627m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about P.A. Resources Berhad.

View our latest analysis for P.A. Resources Berhad

What Does The Lack Of Institutional Ownership Tell Us About P.A. Resources Berhad?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. 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. P.A. Resources Berhad's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in P.A. Resources Berhad. Looking at our data, we can see that the largest shareholder is Kong Chan with 9.7% of shares outstanding. With 6.1% and 4.6% of the shares outstanding respectively, Fajarbaru Builder Group Bhd. and Sekitar Tropika Sdn. Bhd. are the second and third largest shareholders. In addition, we found that Kuan Lau, the CEO has 4.3% of the shares allocated to their name.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of P.A. Resources 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.

It seems insiders own a significant proportion of P.A. Resources Berhad. It has a market capitalization of just RM627m, and insiders have RM255m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 49% ownership, the general public have some degree of sway over P.A. Resources 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

It seems that Private Companies own 4.7%, of the P.A. Resources Berhad stock. 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.

Public Company Ownership

We can see that public companies hold 6.1% of the P.A. Resources Berhad shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand P.A. Resources Berhad better, we need to consider many other factors. Take risks for example - P.A. Resources Berhad has 3 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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. 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.
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