OSK Holdings Berhad's (KLSE:OSK) market cap surged RM247m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in OSK Holdings Berhad indicates that they collectively have a greater say in management and business strategy
• Yellow Rock (L) Foundation owns 50% of the company
• Insiders own 14% of OSK Holdings Berhad

To get a sense of who is truly in control of OSK Holdings Berhad (KLSE:OSK), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies were the biggest beneficiaries of last week’s 8.1% gain.

Let's take a closer look to see what the different types of shareholders can tell us about OSK Holdings Berhad.

View our latest analysis for OSK Holdings Berhad

What Does The Institutional Ownership Tell Us About OSK Holdings 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.

OSK Holdings 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. 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 OSK Holdings Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in OSK Holdings Berhad. Yellow Rock (L) Foundation is currently the company's largest shareholder with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. With 3.2% and 2.0% of the shares outstanding respectively, Leong Huat Ong and Ean Hai Toh are the second and third largest shareholders. Leong Huat Ong, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Ju Ong directly holds 1.3% of the total shares outstanding.

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 OSK Holdings 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.

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.

It seems insiders own a significant proportion of OSK Holdings Berhad. It has a market capitalization of just RM3.3b, and insiders have RM473m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 29% stake in OSK Holdings 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 50%, of the OSK Holdings Berhad stock. 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 OSK Holdings Berhad better, we need to consider many other factors. For example, we've discovered 2 warning signs for OSK Holdings Berhad (1 is potentially serious!) that you should be aware of before investing here.

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. 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.