Arcos Dorados Holdings Inc. (NYSE:ARCO) Top Key Executive Woods Staton, the company's largest shareholder sees 7.7%reduction in holdings value
Key Insights
- Arcos Dorados Holdings' significant insider ownership suggests inherent interests in company's expansion
- 50% of the business is held by the top 4 shareholders
- Institutions own 42% of Arcos Dorados Holdings
A look at the shareholders of Arcos Dorados Holdings Inc. (NYSE:ARCO) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, insiders endured the biggest losses as the stock fell by 7.7%.
Let's take a closer look to see what the different types of shareholders can tell us about Arcos Dorados Holdings.
See our latest analysis for Arcos Dorados Holdings
What Does The Institutional Ownership Tell Us About Arcos Dorados Holdings?
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.
We can see that Arcos Dorados Holdings 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Arcos Dorados Holdings' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Arcos Dorados Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Arcos Dorados Holdings' case, its Top Key Executive, Woods Staton, is the largest shareholder, holding 38% of shares outstanding. With 4.7% and 4.5% of the shares outstanding respectively, Teachers Insurance and Annuity Association-College Retirement Equities Fund and David Calvo are the second and third largest shareholders.
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 considerable sway over the company's decision-making.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Arcos Dorados Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 insiders own a significant proportion of Arcos Dorados Holdings Inc.. It has a market capitalization of just US$1.5b, and insiders have US$627m worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 16% stake in Arcos Dorados Holdings. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Arcos Dorados Holdings , and understanding them should be part of your investment process.
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.
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.