Eco World Development Group Berhad's (KLSE:ECOWLD) last week's 15% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Eco World Development Group Berhad indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 51% of the company
• Insiders own 20% of Eco World Development Group Berhad

A look at the shareholders of Eco World Development Group Berhad (KLSE:ECOWLD) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 15% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 20% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Eco World Development Group Berhad.

Check out our latest analysis for Eco World Development Group Berhad

What Does The Institutional Ownership Tell Us About Eco World Development Group Berhad?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Eco World Development Group 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. 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 Eco World Development Group Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Eco World Development Group Berhad is not owned by hedge funds. Syabas Tropikal Sdn Bhd is currently the largest shareholder, with 33% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder. Kee Liew, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Eco World Development Group 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.

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 Eco World Development Group Berhad. Insiders own RM890m worth of shares in the RM4.4b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Eco World Development Group Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 48%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Eco World Development Group Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Eco World Development Group Berhad you should know about.

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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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@simplywallst.com