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Pappajack Berhad (KLSE:PPJACK) most popular amongst private companies who own 42%, insiders hold 33%
Key Insights
Significant control over Pappajack Berhad by private companies implies that the general public has more power to influence management and governance-related decisions
52% of the business is held by the top 3 shareholders
To get a sense of who is truly in control of Pappajack Berhad (KLSE:PPJACK), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 42% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Individual insiders, on the other hand, account for 33% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of Pappajack Berhad.
See our latest analysis for Pappajack Berhad
What Does The Lack Of Institutional Ownership Tell Us About Pappajack Berhad?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Pappajack Berhad, for yourself, below.
We note that hedge funds don't have a meaningful investment in Pappajack Berhad. TSE Sejahtera Sdn. Bhd. is currently the largest shareholder, with 42% of shares outstanding. With 7.4% and 2.9% of the shares outstanding respectively, Boon Lim and Leng Chow Chew are the second and third largest shareholders. Boon Lim, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Pappajack Berhad
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
It seems insiders own a significant proportion of Pappajack Berhad. Insiders own RM258m worth of shares in the RM791m company. 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
With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pappajack 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.
Private Company Ownership
It seems that Private Companies own 42%, of the Pappajack Berhad stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Pappajack Berhad (of which 1 doesn't sit too well with us!) you should know about.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
