Are Institutions Heavily Invested In Thong Guan Industries Berhad's (KLSE:TGUAN) Shares?

If you want to know who really controls Thong Guan Industries Berhad (KLSE:TGUAN), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Thong Guan Industries Berhad is a smaller company with a market capitalization of RM931m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Thong Guan Industries Berhad.

See our latest analysis for Thong Guan Industries Berhad

What Does The Institutional Ownership Tell Us About Thong Guan Industries 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.

As you can see, institutional investors have a fair amount of stake in Thong Guan Industries Berhad. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Thong Guan Industries Berhad's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Thong Guan Industries Berhad. The company's largest shareholder is Foremost Equals Sdn Bhd, with ownership of 39%. With 4.2% and 3.6% of the shares outstanding respectively, Norges Bank Investment Management and Public Mutual Berhad are the second and third largest shareholders. Additionally, the company's CEO Poon Ang directly holds 0.7% of the total shares outstanding.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Thong Guan Industries Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Thong Guan Industries Berhad. As individuals, the insiders collectively own RM44m worth of the RM931m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 34% ownership, the general public have some degree of sway over Thong Guan Industries 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 42%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Thong Guan Industries Berhad , and understanding them should be part of your investment process.

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.

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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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