Insiders with their considerable ownership were the key benefactors as RGT Berhad (KLSE:RGTBHD) touches RM491m market cap

By
Simply Wall St
Published
November 23, 2021
KLSE:RGTBHD
Source: Shutterstock

Every investor in RGT Berhad (KLSE:RGTBHD) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit RM491m market cap following a 14% gain in the stock.

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

See our latest analysis for RGT Berhad

ownership-breakdown
KLSE:RGTBHD Ownership Breakdown November 24th 2021

What Does The Institutional Ownership Tell Us About RGT 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.

RGT Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at RGT Berhad's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
KLSE:RGTBHD Earnings and Revenue Growth November 24th 2021

Hedge funds don't have many shares in RGT Berhad. Lim-Chee Hor is currently the company's largest shareholder with 10% of shares outstanding. Vertical Portal Sdn Bhd is the second largest shareholder owning 8.6% of common stock, and Choon Keat Ng holds about 6.3% of the company stock. Choon Keat Ng, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Seat-Hoe Lim, the CEO has 2.5% of the shares allocated to their name.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of RGT Berhad

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders maintain a significant holding in RGT Berhad. Insiders have a RM196m stake in this RM491m business. We 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 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RGT 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

Our data indicates that Private Companies hold 20%, of the company's shares. 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:

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. Be aware that RGT Berhad is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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