Genetec Technology Berhad's (KLSE:GENETEC) largest shareholders are retail investors with 42% ownership, insiders own 31%
Simply Wall St
4 min read
Key Insights
The considerable ownership by retail investors in Genetec Technology Berhad indicates that they collectively have a greater say in management and business strategy
A total of 15 investors have a majority stake in the company with 50% ownership
Every investor in Genetec Technology Berhad (KLSE:GENETEC) should be aware of the most powerful shareholder groups. With 42% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual insiders make up 31% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Genetec Technology Berhad.
What Does The Institutional Ownership Tell Us About Genetec Technology Berhad?
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.
Genetec Technology Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Genetec Technology Berhad's historic earnings and revenue below, but keep in mind there's always more to the story.
KLSE:GENETEC Earnings and Revenue Growth May 1st 2023
Genetec Technology Berhad is not owned by hedge funds. Khai Chen is currently the company's largest shareholder with 12% of shares outstanding. With 7.0% and 6.2% of the shares outstanding respectively, Kem Chin and ATIS Corporation Berhad are the second and third largest shareholders. Kem Chin, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Genetec Technology Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 insiders own a significant proportion of Genetec Technology Berhad. Insiders have a RM665m stake in this RM2.1b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 42% 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
Our data indicates that Private Companies hold 6.2%, 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 Genetec Technology Berhad better, we need to consider many other factors. For example, we've discovered 1 warning sign for Genetec Technology Berhad that you should be aware of before investing here.
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.
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