Key Insights

• REDtone Digital Berhad's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public

• The top 2 shareholders own 63% of the company

• Insiders own 20% of REDtone Digital Berhad

If you want to know who really controls REDtone Digital Berhad (KLSE:REDTONE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, individual investors make up 24% of the company’s shareholders.

Let's delve deeper into each type of owner of REDtone Digital Berhad, beginning with the chart below.

See our latest analysis for REDtone Digital Berhad

What Does The Institutional Ownership Tell Us About REDtone Digital 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.

As you can see, institutional investors have a fair amount of stake in REDtone Digital Berhad. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of REDtone Digital Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in REDtone Digital Berhad. Our data shows that Berjaya Corporation Berhad is the largest shareholder with 45% of shares outstanding. Dymm Johar is the second largest shareholder owning 17% of common stock, and Eastspring Investments (Singapore) Limited holds about 3.1% of the company stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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.

Insider Ownership Of REDtone Digital 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.

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.

It seems insiders own a significant proportion of REDtone Digital Berhad. It has a market capitalization of just RM499m, and insiders have RM102m worth of shares in their own names. 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

The general public-- including retail investors -- own 24% 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.

Public Company Ownership

We can see that public companies hold 47% of the REDtone Digital Berhad shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand REDtone Digital Berhad better, we need to consider many other factors. Take risks for example - REDtone Digital Berhad has 2 warning signs (and 1 which can't be ignored) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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