Following recent decline, Arezzo Indústria e Comércio S.A.'s (BVMF:ARZZ3) top shareholder CEO Alexandre Birman sees holdings value drop by 10%

Key Insights

• Insiders appear to have a vested interest in Arezzo Indústria e Comércio's growth, as seen by their sizeable ownership
• A total of 9 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Arezzo Indústria e Comércio is 22%

If you want to know who really controls Arezzo Indústria e Comércio S.A. (BVMF:ARZZ3), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to R$5.6b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Arezzo Indústria e Comércio, beginning with the chart below.

View our latest analysis for Arezzo Indústria e Comércio

What Does The Institutional Ownership Tell Us About Arezzo Indústria e Comércio?

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.

Arezzo Indústria e Comércio already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Arezzo Indústria e Comércio's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Arezzo Indústria e Comércio. Looking at our data, we can see that the largest shareholder is the CEO Alexandre Birman with 22% of shares outstanding. For context, the second largest shareholder holds about 5.2% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Arezzo Indústria e Comércio

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our information suggests that insiders maintain a significant holding in Arezzo Indústria e Comércio S.A.. It has a market capitalization of just R$5.6b, and insiders have R$2.3b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Take risks for example - Arezzo Indústria e Comércio has 1 warning sign we think you should be aware of.

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.

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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.