Key Insights
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Velesto Energy Berhad’s significant sovereign wealth funds ownership suggests that the key decisions are influenced by shareholders from the larger public
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The largest shareholder of the company is Permodalan Nasional Berhad with a 51% stake
To get a sense of who is truly in control of Velesto Energy Berhad (KLSE:VELESTO), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is sovereign wealth funds. Put another way, the group faces the maximum upside potential (or downside risk).
Sovereign wealth funds gained the most after market cap touched RM2.4b last week, while institutions who own 25% also benefitted.
Let’s delve deeper into each type of owner of Velesto Energy Berhad, beginning with the chart below.
See our latest analysis for Velesto Energy Berhad
What Does The Institutional Ownership Tell Us About Velesto Energy 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.
We can see that Velesto Energy Berhad does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Velesto Energy Berhad’s historic earnings and revenue below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in Velesto Energy Berhad. The company’s largest shareholder is Permodalan Nasional Berhad, with ownership of 51%. This implies that they have majority interest control of the future of the company. With 7.8% and 3.5% of the shares outstanding respectively, Hong Leong Asset Management Bhd. and Urusharta Jamaah Sdn Bhd are the second and third largest shareholders.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Velesto Energy 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 data suggests that insiders own under 1% of Velesto Energy Berhad in their own names. It appears that the board holds about RM11m worth of stock. This compares to a market capitalization of RM2.4b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public– including retail investors — own 23% 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.
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.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
