Unisem (M) Berhad's (KLSE:UNISEM) 6.8% gain last week benefited both public companies who own 41% as well as insiders

Key Insights

• The considerable ownership by public companies in Unisem (M) Berhad indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 69% of the company
• Insider ownership in Unisem (M) Berhad is 30%

Every investor in Unisem (M) Berhad (KLSE:UNISEM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Public companies gained the most after market cap touched RM5.0b last week, while insiders who own 30% also benefitted.

In the chart below, we zoom in on the different ownership groups of Unisem (M) Berhad.

View our latest analysis for Unisem (M) Berhad

What Does The Institutional Ownership Tell Us About Unisem (M) 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.

We can see that Unisem (M) Berhad 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 Unisem (M) 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 Unisem (M) Berhad. The company's largest shareholder is Tianshui Huatian Technology Co., Ltd., with ownership of 41%. In comparison, the second and third largest shareholders hold about 27% and 3.0% of the stock. Sin Chia, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Unisem (M) Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Unisem (M) Berhad. It is very interesting to see that insiders have a meaningful RM1.5b stake in this RM5.0b business. 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

The general public-- including retail investors -- own 12% 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

We can see that public companies hold 41% of the Unisem (M) Berhad shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 - Unisem (M) 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.

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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.