Institutional owners may ignore TIME dotCom Berhad's (KLSE:TIMECOM) recent RM296m market cap decline as longer-term profits stay in the green

Key Insights

• Significantly high institutional ownership implies TIME dotCom Berhad's stock price is sensitive to their trading actions
• 50% of the business is held by the top 5 shareholders
• 10% of TIME dotCom Berhad is held by insiders

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A look at the shareholders of TIME dotCom Berhad (KLSE:TIMECOM) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors endured the highest losses after the company's market cap fell by RM296m last week. Still, the 14% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future.

In the chart below, we zoom in on the different ownership groups of TIME dotCom Berhad.

Check out our latest analysis for TIME dotCom Berhad

What Does The Institutional Ownership Tell Us About TIME dotCom 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.

We can see that TIME dotCom 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. 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 TIME dotCom Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in TIME dotCom Berhad. Looking at our data, we can see that the largest shareholder is Employees Provident Fund of Malaysia with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 9.9% of the stock. Afzal Rahim, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

On looking further, we found that 50% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 TIME dotCom Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of TIME dotCom Berhad. It has a market capitalization of just RM9.2b, and insiders have RM962m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in TIME dotCom 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.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand TIME dotCom Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for TIME dotCom Berhad you should know about.

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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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.