Stock Analysis

Is Ta Ann Holdings Berhad's (KLSE:TAANN) Shareholder Ownership Skewed Towards Insiders?

KLSE:TAANN
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If you want to know who really controls Ta Ann Holdings Berhad (KLSE:TAANN), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Ta Ann Holdings Berhad is a smaller company with a market capitalization of RM1.4b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Ta Ann Holdings Berhad.

See our latest analysis for Ta Ann Holdings Berhad

ownership-breakdown
KLSE:TAANN Ownership Breakdown December 2nd 2020

What Does The Institutional Ownership Tell Us About Ta Ann Holdings 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.

Ta Ann Holdings 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Ta Ann Holdings Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

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KLSE:TAANN Earnings and Revenue Growth December 2nd 2020

Hedge funds don't have many shares in Ta Ann Holdings Berhad. The company's largest shareholder is Mountex Sdn Bhd, with ownership of 25%. With 10% and 9.4% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Sa’id Bin Haji Dolah are the second and third largest shareholders. Sa’id Bin Haji Dolah, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Kuo Hea Wong directly holds 4.2% of the total shares outstanding.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ta Ann Holdings Berhad

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Ta Ann Holdings Berhad. It has a market capitalization of just RM1.4b, and insiders have RM385m 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

The general public, with a 18% stake in the company, will not easily be ignored. 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 39%, of the company's shares. 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 Ta Ann Holdings Berhad better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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