Is QES Group Berhad (KLSE:QES) Popular Amongst Insiders?

By
Simply Wall St
Published
May 28, 2021
KLSE:QES
Source: Shutterstock

Every investor in QES Group Berhad (KLSE:QES) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

QES Group Berhad is not a large company by global standards. It has a market capitalization of RM509m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about QES Group Berhad.

Check out our latest analysis for QES Group Berhad

ownership-breakdown
KLSE:QES Ownership Breakdown May 29th 2021

What Does The Institutional Ownership Tell Us About QES Group Berhad?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of QES Group Berhad is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
KLSE:QES Earnings and Revenue Growth May 29th 2021

QES Group Berhad is not owned by hedge funds. The company's CEO Ne Chew is the largest shareholder with 31% of shares outstanding. With 24% and 1.9% of the shares outstanding respectively, Soo Liew and Public Mutual Berhad are the second and third largest shareholders. Interestingly, the second-largest shareholder, Soo Liew is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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 QES Group 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.

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.

It seems that insiders own more than half the QES Group Berhad stock. This gives them a lot of power. So they have a RM308m stake in this RM509m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 36% stake in QES Group Berhad. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that QES Group Berhad is showing 3 warning signs in our investment analysis , and 2 of those don't sit too well with us...

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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