Golden Agri-Resources Ltd's (SGX:E5H) market cap dropped S$127m last week; Private companies bore the brunt

Key Insights

• Significant control over Golden Agri-Resources by private companies implies that the general public has more power to influence management and governance-related decisions
• Flambo International Limited owns 51% of the company
• Recent purchases by insiders

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A look at the shareholders of Golden Agri-Resources Ltd (SGX:E5H) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to S$3.3b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Golden Agri-Resources, beginning with the chart below.

View our latest analysis for Golden Agri-Resources

What Does The Institutional Ownership Tell Us About Golden Agri-Resources?

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 Golden Agri-Resources 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 Golden Agri-Resources, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Golden Agri-Resources. Flambo International Limited is currently the company's largest shareholder with 51% 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 11% and 5.4% of the shares outstanding respectively, Silchester International Investors LLP and Kopernik Global Investors, LLC are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Golden Agri-Resources

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 Golden Agri-Resources Ltd insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex 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 S$157k worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 51%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 - Golden Agri-Resources has 2 warning signs (and 1 which is significant) we think 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.