CUCKOO International (MAL) Berhad's (KLSE:CKI) stock price dropped 17% last week; public companies would not be happy

Key Insights

• The considerable ownership by public companies in CUCKOO International (MAL) Berhad indicates that they collectively have a greater say in management and business strategy
• CUCKOO Homesys Co., Ltd owns 52% of the company
• 22% of CUCKOO International (MAL) Berhad is held by insiders

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To get a sense of who is truly in control of CUCKOO International (MAL) Berhad (KLSE:CKI), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 52% 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, public companies as a group endured the highest losses last week after market cap fell by RM172m.

In the chart below, we zoom in on the different ownership groups of CUCKOO International (MAL) Berhad.

View our latest analysis for CUCKOO International (MAL) Berhad

What Does The Institutional Ownership Tell Us About CUCKOO International (MAL) Berhad?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Less than 5% of CUCKOO International (MAL) Berhad is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

CUCKOO International (MAL) Berhad is not owned by hedge funds. The company's largest shareholder is CUCKOO Homesys Co., Ltd, with ownership of 52%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Bon Hak Koo is the second largest shareholder owning 11% of common stock, and Kian Hoe holds about 10.0% of the company stock. Kian Hoe, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of CUCKOO International (MAL) 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.

It seems insiders own a significant proportion of CUCKOO International (MAL) Berhad. It has a market capitalization of just RM860m, and insiders have RM186m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 25% stake in CUCKOO International (MAL) Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 52% of CUCKOO International (MAL) Berhad. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 CUCKOO International (MAL) Berhad is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.