With 66% ownership, NationGate Holdings Berhad (KLSE:NATGATE) insiders have a lot riding on the company's future

Simply Wall St

Updated Fri, Apr 14, 2023, 8:52 PM 4 min read

Key Insights

NationGate Holdings Berhad's significant insider ownership suggests inherent interests in company's expansion
65% of the company is held by a single shareholder (Eng Ooi)
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of NationGate Holdings Berhad (KLSE:NATGATE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 66% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of NationGate Holdings Berhad regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about NationGate Holdings Berhad.

View our latest analysis for NationGate Holdings Berhad

ownership-breakdown — KLSE:NATGATE Ownership Breakdown April 15th 2023

What Does The Lack Of Institutional Ownership Tell Us About NationGate Holdings Berhad?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. NationGate Holdings Berhad's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

earnings-and-revenue-growth — KLSE:NATGATE Earnings and Revenue Growth April 15th 2023

NationGate Holdings Berhad is not owned by hedge funds. The company's CEO Eng Ooi is the largest shareholder with 65% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. For context, the second largest shareholder holds about 0.8% of the shares outstanding, followed by an ownership of 0.3% by the third-largest shareholder. Note that two of the top three shareholders are also Chief Operating Officer and Chairman of the Board, respectively, once again pointing to significant ownership by company insiders.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of NationGate Holdings Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems that insiders own more than half the NationGate Holdings Berhad stock. This gives them a lot of power. That means they own RM1.8b worth of shares in the RM2.7b company. That's quite meaningful. 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NationGate Holdings Berhad. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 NationGate Holdings Berhad is showing 2 warning signs in our investment analysis , you should know about...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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