Duopharma Biotech Berhad (KLSE:DPHARMA) market capitalization fell by RM162 million last week; Sovereign funds have paid the price
Every investor in Duopharma Biotech Berhad (KLSE: DPHARMA) should know the most powerful shareholder groups. And the group that holds the biggest slice of the pie are the sovereign wealth funds with 52% ownership. In other words, the group faces the maximum upside potential (or downside risk).
As the market capitalization fell to RM1.1 billion last week, sovereign wealth funds would have suffered the highest losses than any other group of shareholders in the company.
In the table below, we zoom in on the different ownership groups of Duopharma Biotech Berhad.
See our latest analysis for Duopharma Biotech Berhad
What does institutional ownership tell us about Duopharma Biotech 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 is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
We can see that Duopharma Biotech Berhad has institutional investors; and they own a good part of the shares of 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 Duopharma Biotech Berhad’s revenue and historical earnings below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Duopharma Biotech Berhad. The company’s largest shareholder is Permodalan Nasional Berhad, with a 52% stake. This essentially means that they have considerable influence, if not absolute control, over the future of the company. With 9.2% and 2.8% of outstanding shares respectively, Employees Provident Fund of Malaysia and CIMB Group Holdings Berhad, Asset Management Arm are the second and third largest shareholders.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the sentiments of analysts. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider Ownership of Duopharma Biotech Berhad
The definition of an insider may differ slightly from country to country, but board members still matter. 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.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that Duopharma Biotech Berhad insiders own less than 1% of the company. However, insiders may have an indirect interest through a more complex structure. It has a market capitalization of just RM1.1 billion and the board holds only RM5.1 million of shares in its own name. We generally like to see a more invested board. However, it may be useful to check whether these insiders have bought.
General public property
With a 26% stake, the general public, consisting mainly of individual investors, has some influence over Duopharma Biotech Berhad. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
It is always useful to think about the different groups that own shares in a company. But to better understand Duopharma Biotech Berhad, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 2 warning signs with Duopharma Biotech Berhad (at least 1, which is a little worrying), and understanding them should be part of your investment process.
At the end of the day the future is the most important. You can access this free analyst forecast report for the company.
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 in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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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.