Top Glove Corporation Bhd.'s (KLSE:TOPGLOV) stock price dropped 5.3% last week; individual investors would not be happy
Key Insights
- Top Glove Corporation Bhd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 6 investors have a majority stake in the company with 52% ownership
- Insider ownership in Top Glove Corporation Bhd is 31%
If you want to know who really controls Top Glove Corporation Bhd. (KLSE:TOPGLOV), then you'll have to look at the makeup of its share registry. With 36% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While the holdings of individual investors took a hit after last week’s 5.3% price drop, insiders with their 31% also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Top Glove Corporation Bhd.
See our latest analysis for Top Glove Corporation Bhd
What Does The Institutional Ownership Tell Us About Top Glove Corporation Bhd?
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.
As you can see, institutional investors have a fair amount of stake in Top Glove Corporation Bhd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Top Glove Corporation Bhd's earnings history below. Of course, the future is what really matters.
Top Glove Corporation Bhd is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Top Glove Corporation Bhd's case, its Top Key Executive, Wee Chai Lim, is the largest shareholder, holding 29% of shares outstanding. For context, the second largest shareholder holds about 6.9% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder.
We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Top Glove Corporation Bhd
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 insiders maintain a significant holding in Top Glove Corporation Bhd.. It has a market capitalization of just RM5.0b, and insiders have RM1.5b 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-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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
We can see that Private Companies own 7.0%, 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Top Glove Corporation Bhd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Top Glove Corporation Bhd that you should be aware of before investing here.
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.