Private companies own 41% of Paramount Corporation Berhad (KLSE:PARAMON) shares but retail investors control 43% of the company
Simply Wall St
5 min read
Key Insights
Paramount Corporation Berhad's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
Every investor in Paramount Corporation Berhad (KLSE:PARAMON) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And private companies on the other hand have a 41% ownership in the company.
Let's delve deeper into each type of owner of Paramount Corporation Berhad, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Paramount Corporation 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.
Less than 5% of Paramount Corporation Berhad is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
KLSE:PARAMON Earnings and Revenue Growth May 29th 2023
Hedge funds don't have many shares in Paramount Corporation Berhad. Looking at our data, we can see that the largest shareholder is Paramount Equities Sdn Bhd with 25% of shares outstanding. For context, the second largest shareholder holds about 8.4% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. Furthermore, CEO Sun Teong Chew is the owner of 1.5% of the company's shares.
We also observed that the top 10 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.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Paramount Corporation Berhad
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our most recent data indicates that insiders own some shares in Paramount Corporation Berhad. It has a market capitalization of just RM498m, and insiders have RM38m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. 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 Company Ownership
Our data indicates that Private Companies hold 41%, 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.
Public Company Ownership
It appears to us that public companies own 4.3% of Paramount Corporation Berhad. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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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