Insiders own 25% of Southern Score Builders Berhad (KLSE:SSB8) shares but

Key Insights

• The considerable ownership by private companies in Southern Score Builders Berhad indicates that they collectively have a greater say in management and business strategy

• 60% of the business is held by the top 2 shareholders

• Insiders own 25% of Southern Score Builders Berhad

Every investor in Southern Score Builders Berhad (KLSE:SSB8) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And individual insiders on the other hand have a 25% ownership in the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let’s delve deeper into each type of owner of Southern Score Builders Berhad, beginning with the chart below.

See our latest analysis for Southern Score Builders Berhad

What Does The Institutional Ownership Tell Us About Southern Score Builders Berhad?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Southern Score Builders Berhad does have institutional investors; and they hold a good portion of the company’s stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Southern Score Builders Berhad’s earnings history below. Of course, the future is what really matters.

Hedge funds don’t have many shares in Southern Score Builders Berhad. Super Advantage Property Sdn Bhd is currently the company’s largest shareholder with 46% of shares outstanding. With 13% and 4.0% of the shares outstanding respectively, Yee Gan and CVC Capital Partners Limited are the second and third largest shareholders. Yee Gan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 60% stake.

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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

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Insider Ownership Of Southern Score Builders Berhad

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Southern Score Builders Berhad. Insiders have a RM226m stake in this RM898m 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

The general public– including retail investors — own 13% 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

It seems that Private Companies own 52%, of the Southern Score Builders Berhad stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We’ve identified 3 warning signs with Southern Score Builders Berhad (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

Of course this may not be the best…