Private companies are MBM Resources Berhad's (KLSE:MBMR) biggest owners and were hit after market cap dropped RM223m

Key Insights

• Significant control over MBM Resources Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the company is held by a single shareholder (Med-Bumikar Mara Sdn. Bhd.)
• Institutional ownership in MBM Resources Berhad is 21%

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

A look at the shareholders of MBM Resources Berhad (KLSE:MBMR) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 11% decline in share price, private companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of MBM Resources Berhad.

See our latest analysis for MBM Resources Berhad

What Does The Institutional Ownership Tell Us About MBM Resources 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.

We can see that MBM Resources Berhad does have institutional investors; and they hold a good portion of the company's stock. 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. 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 MBM Resources Berhad's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in MBM Resources Berhad. Our data shows that Med-Bumikar Mara Sdn. Bhd. is the largest shareholder with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 4.5% and 4.4%, of the shares outstanding, respectively.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of MBM Resources Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders do own shares in MBM Resources Berhad. As individuals, the insiders collectively own RM38m worth of the RM1.7b 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 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MBM Resources 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

We can see that Private Companies own 53%, of the shares on issue. 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:

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. To that end, you should be aware of the 1 warning sign we've spotted with MBM Resources Berhad .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.