Stock Analysis

With 48% stake, Inari Amertron Berhad (KLSE:INARI) seems to have captured institutional investors' interest

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Key Insights

  • Institutions' substantial holdings in Inari Amertron Berhad implies that they have significant influence over the company's share price
  • A total of 11 investors have a majority stake in the company with 51% ownership
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Inari Amertron Berhad (KLSE:INARI), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

In the chart below, we zoom in on the different ownership groups of Inari Amertron Berhad.

Check out our latest analysis for Inari Amertron Berhad

KLSE:INARI Ownership Breakdown March 15th 2023

What Does The Institutional Ownership Tell Us About Inari Amertron 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.

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

KLSE:INARI Earnings and Revenue Growth March 15th 2023

Inari Amertron Berhad is not owned by hedge funds. Our data shows that Insas Berhad is the largest shareholder with 14% of shares outstanding. With 11% and 9.2% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Kumpulan Wang Persaraan are the second and third largest shareholders. Furthermore, CEO Kean Lau is the owner of 1.3% of the company's shares.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Inari Amertron 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.

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.

We can see that insiders own shares in Inari Amertron Berhad. This is a big company, so it is good to see this level of alignment. Insiders own RM258m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

Public companies currently own 14% of Inari Amertron Berhad stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Take risks for example - Inari Amertron Berhad has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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Inari Amertron Berhad

Inari Amertron Berhad, an investment holding company, provides outsourced semiconductor assembly and test services for radio frequency, fiber-optics transceivers, optoelectronics, sensors, and custom integrated circuit (IC) technologies in Malaysia, Singapore, the United States, China, and internationally.

Flawless balance sheet with acceptable track record.