Key Insights

• Unitrade Industries Berhad's significant insider ownership suggests inherent interests in company's expansion

• Keng Chor Sim owns 66% of the company

• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Unitrade Industries Berhad (KLSE:UNITRAD), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 79% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of Unitrade Industries Berhad 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.

Let's delve deeper into each type of owner of Unitrade Industries Berhad, beginning with the chart below.

Check out our latest analysis for Unitrade Industries Berhad

What Does The Institutional Ownership Tell Us About Unitrade Industries 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.

Since institutions own only a small portion of Unitrade Industries Berhad, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Unitrade Industries Berhad. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Unitrade Industries Berhad's case, its Senior Key Executive, Keng Chor Sim, is the largest shareholder, holding 66% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 2.6% and 2.1%, of the shares outstanding, respectively. Note that two of the top three shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

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 Unitrade Industries 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Unitrade Industries Berhad. This means they can collectively make decisions for the company. So they have a RM387m stake in this RM492m business. 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

The general public, who are usually individual investors, hold a 18% stake in Unitrade Industries Berhad. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Unitrade Industries Berhad better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Unitrade Industries Berhad (of which 2 can't be ignored!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.