Private companies who have a significant stake must be disappointed along with institutions after Malaysian Pacific Industries Berhad's (KLSE:MPI) market cap dropped by RM363m

Key Insights

• Malaysian Pacific Industries Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 58% of the company is held by a single shareholder (Hong Leong Company (Malaysia) Berhad (Hlcm))
• 28% of Malaysian Pacific Industries Berhad is held by Institutions

A look at the shareholders of Malaysian Pacific Industries Berhad (KLSE:MPI) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 28% shares weren’t spared from last week’s RM363m market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Malaysian Pacific Industries Berhad, beginning with the chart below.

Check out our latest analysis for Malaysian Pacific Industries Berhad

What Does The Institutional Ownership Tell Us About Malaysian Pacific Industries Berhad?

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 Malaysian Pacific Industries Berhad does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Malaysian Pacific Industries Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Malaysian Pacific Industries Berhad. Hong Leong Company (Malaysia) Berhad (Hlcm) is currently the largest shareholder, with 58% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 8.0% and 3.4% of the shares outstanding respectively, Employees Provident Fund of Malaysia and Public Mutual Bhd. are the second and third largest shareholders.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Malaysian Pacific Industries Berhad

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of Malaysian Pacific Industries Berhad. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around RM52m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Malaysian Pacific Industries Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 59%, of the Malaysian Pacific Industries Berhad stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.