While institutions own 34% of Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3), state or government are its largest shareholders with 50% ownership

Key Insights

• The considerable ownership by state or government in Companhia de Saneamento Básico do Estado de São Paulo - SABESP indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Government of the State of Sao Paulo with a 50% stake
• 34% of Companhia de Saneamento Básico do Estado de São Paulo - SABESP is held by Institutions

A look at the shareholders of Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are state or government with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 34% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

Let's take a closer look to see what the different types of shareholders can tell us about Companhia de Saneamento Básico do Estado de São Paulo - SABESP.

View our latest analysis for Companhia de Saneamento Básico do Estado de São Paulo - SABESP

What Does The Institutional Ownership Tell Us About Companhia de Saneamento Básico do Estado de São Paulo - SABESP?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Companhia de Saneamento Básico do Estado de São Paulo - SABESP does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Companhia de Saneamento Básico do Estado de São Paulo - SABESP's historic earnings and revenue below, but keep in mind there's always more to the story.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Government of the State of Sao Paulo with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 3.0% by the third-largest shareholder.

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. 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 Companhia de Saneamento Básico do Estado de São Paulo - SABESP

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Companhia de Saneamento Básico do Estado de São Paulo - SABESP. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For instance, we've identified 1 warning sign for Companhia de Saneamento Básico do Estado de São Paulo - SABESP that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.