Globetronics Technology Bhd.'s (KLSE:GTRONIC) market cap touched RM992m last week, benefiting both retail investors who own 43% as well as institutions

Key Insights

• Significant control over Globetronics Technology Bhd by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 9 investors have a majority stake in the company with 50% ownership
• Insiders own 16% of Globetronics Technology Bhd

To get a sense of who is truly in control of Globetronics Technology Bhd. (KLSE:GTRONIC), it is important to understand the ownership structure of the business. With 43% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week’s RM142m market cap gain, institutions too had a 30% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Globetronics Technology Bhd.

See our latest analysis for Globetronics Technology Bhd

What Does The Institutional Ownership Tell Us About Globetronics Technology Bhd?

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.

We can see that Globetronics Technology Bhd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Globetronics Technology Bhd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Globetronics Technology Bhd. The company's largest shareholder is Keng Thye Ooi, with ownership of 11%. The second and third largest shareholders are APB Resources Berhad and Employees Provident Fund of Malaysia, with an equal amount of shares to their name at 10%.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Globetronics Technology Bhd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our most recent data indicates that insiders own a reasonable proportion of Globetronics Technology Bhd.. It has a market capitalization of just RM992m, and insiders have RM163m 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 43% stake in Globetronics Technology Bhd. 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.

Public Company Ownership

It appears to us that public companies own 10% of Globetronics Technology Bhd. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Globetronics Technology Bhd has 1 warning sign 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.

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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.