Market cap

Pertama Digital Berhad (KLSE:PERTAMA) market cap increased by RM65m, insiders receive 52% cut

Every investor in Pertama Digital Berhad (KLSE: PERTAMA) should know the most powerful shareholder groups. We can see that individual insiders hold the lion’s share of the company with 52% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

Clearly, insiders benefited the most after the company’s market capitalization increased by RM65 million last week.

Let’s take a closer look at what different types of shareholders can tell us about Pertama Digital Berhad.

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KLSE: Distribution of ownership of PERTAMA November 12, 2022

What does institutional ownership tell us about Pertama Digital Berhad?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Pertama Digital Berhad already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Pertama Digital Berhad’s historical revenue and earnings below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
KLSE: PERTAMA Earnings and Revenue Growth November 12, 2022

Hedge funds do not have many shares in Pertama Digital Berhad. Our data shows that Perfect Hexagon Limited, Asset Management Arm is the largest shareholder with 23% of shares outstanding. With respectively 12% and 12% of the outstanding shares, Sabri Bin Abdul Rahman and Nik Bin Nik Hassan Thani are the second and third shareholders. Sabri Bin Abdul Rahman, who is the second largest shareholder, also holds the title of Senior Key Executive.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company, which implies that this group has a considerable influence on the decision-making of the company.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Insider ownership of Pertama Digital Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

It appears that insiders own more than half of the shares of Pertama Digital Berhad. It gives them a lot of power. So they have a RM367m stake in this RM706m venture. Most would say this is a positive, showing strong alignment with shareholders. You can click here to see if these insiders have been buying or selling.

General public property

With a 13% stake, the general public, consisting mainly of individual investors, has some influence over Pertama Digital Berhad. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private Company Ownership

Our data indicates that private companies own 12% of the company’s shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.

Next steps:

I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. Take risks for example – Pertama Digital Berhad has 3 warning signs (and 1 which is a little worrying) that we think you should know about.

Sure this may not be the best stock to buy. So take a look at this free free list of interesting companies.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Valuation is complex, but we help make it simple.

Find out if Pertama Digital Berhad is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.