Vivara Participações S.A.'s (BVMF:VIVA3) top holders are insiders and they are likely disappointed by the recent 4.6% drop

Simply Wall St · 10/15 09:07

Key Insights

To get a sense of who is truly in control of Vivara Participações S.A. (BVMF:VIVA3), it is important to understand the ownership structure of the business. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to R$6.3b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Vivara Participações.

Check out our latest analysis for Vivara Participações

ownership-breakdown
BOVESPA:VIVA3 Ownership Breakdown October 15th 2024

What Does The Institutional Ownership Tell Us About Vivara Participações?

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.

As you can see, institutional investors have a fair amount of stake in Vivara Participações. 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 Vivara Participações, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
BOVESPA:VIVA3 Earnings and Revenue Growth October 15th 2024

We note that hedge funds don't have a meaningful investment in Vivara Participações. Our data shows that Nelson Kaufman is the largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.1% of the stock. Marina Kaufman Netto, who is the second-largest shareholder, also happens to hold the title of Member of Management Board.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Vivara Participações

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.

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 that insiders own more than half the Vivara Participações S.A. stock. This gives them a lot of power. Given it has a market cap of R$6.3b, that means insiders have a whopping R$3.2b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vivara Participações. 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 always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.