CEO Pang Yong, Padini Holdings Berhad's (KLSE:PADINI) largest shareholder sees value of holdings go down 13% after recent drop

Key Insights

• Significant insider control over Padini Holdings Berhad implies vested interests in company growth
• The top 2 shareholders own 55% of the company
• Institutional ownership in Padini Holdings Berhad is 39%

A look at the shareholders of Padini Holdings Berhad (KLSE:PADINI) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 13% decline in share price, insiders suffered the most losses.

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

See our latest analysis for Padini Holdings Berhad

What Does The Institutional Ownership Tell Us About Padini Holdings 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.

As you can see, institutional investors have a fair amount of stake in Padini Holdings Berhad. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Padini Holdings Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Padini Holdings Berhad. The company's CEO Pang Yong is the largest shareholder with 45% of shares outstanding. With 10% and 7.5% of the shares outstanding respectively, Kumpulan Wang Persaraan and Employees Provident Fund of Malaysia are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Padini Holdings Berhad

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

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.

Our information suggests that insiders maintain a significant holding in Padini Holdings Berhad. It has a market capitalization of just RM1.7b, and insiders have RM830m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Padini Holdings 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Padini Holdings Berhad better, we need to consider many other factors. Take risks for example - Padini Holdings Berhad has 2 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.