Home » With 35% ownership, SEG International Bhd (KLSE:SEG) insiders have a lot at stake

With 35% ownership, SEG International Bhd (KLSE:SEG) insiders have a lot at stake

by WorldFinance
0 comment 4 minutes read

Every investor in SEG International Bhd (KLSE:SEG) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion’s share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So, insiders of SEG International Bhd have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of SEG International Bhd.

What Does The Institutional Ownership Tell Us About SEG International 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.

SEG International Bhd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SEG International Bhd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don’t have many shares in SEG International Bhd. The company’s CEO Chii Hii is the largest shareholder with 32% of shares outstanding. With 32% and 5.0% of the shares outstanding respectively, Navis Capital Partners and AMMB Holdings Bhd, Asset Management Arm are the second and third largest 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 64% stake.

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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of SEG International Bhd

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.

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 SEG International Bhd. Insiders have a RM280m stake in this RM795m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SEG International Bhd. 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.

Private Equity Ownership

Private equity firms hold a 32% stake in SEG International Bhd. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 9.7%, of the company’s shares. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand SEG International Bhd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with SEG International Bhd , and understanding them should be part of your investment process.

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