Do Institutions Own JF Technology Berhad (KLSE:JFTECH) Shares?

The big shareholder groups in JF Technology Berhad (KLSE:JFTECH) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

JF Technology Berhad is not a large company by global standards. It has a market capitalization of RM1.0b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about JF Technology Berhad.

Check out our latest analysis for JF Technology Berhad

What Does The Institutional Ownership Tell Us About JF Technology 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.

Institutions have a very small stake in JF Technology Berhad. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in JF Technology Berhad. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In JF Technology Berhad's case, its Top Key Executive, Wei Foong, is the largest shareholder, holding 45% of shares outstanding. Mei Wang is the second largest shareholder owning 9.7% of common stock, and Kean Loon Kok holds about 3.8% of the company stock. Interestingly, the second-largest shareholder, Mei Wang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of JF Technology 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.

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.

Our information suggests that insiders own more than half of JF Technology Berhad. This gives them effective control of the company. That means they own RM727m worth of shares in the RM1.0b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 23% ownership, the general public have some degree of sway over JF Technology 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JF Technology Berhad better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for JF Technology Berhad you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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