Is São Carlos Empreendimentos e Participações S.A.'s (BVMF:SCAR3) Shareholder Ownership Skewed Towards Insiders?

If you want to know who really controls São Carlos Empreendimentos e Participações S.A. (BVMF:SCAR3), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

São Carlos Empreendimentos e Participações is a smaller company with a market capitalization of R$2.2b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about São Carlos Empreendimentos e Participações.

See our latest analysis for São Carlos Empreendimentos e Participações

What Does The Institutional Ownership Tell Us About São Carlos Empreendimentos e Participações?

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 São Carlos Empreendimentos e Participações does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 São Carlos Empreendimentos e Participações, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in São Carlos Empreendimentos e Participações. J.P. Morgan Asset Management, Inc. is currently the largest shareholder, with 17% of shares outstanding. The second and third largest shareholders are Marcel Telles and Christian Van Hoegaerden Herrmann Telles, with an equal amount of shares to their name at 8.5%.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of São Carlos Empreendimentos e Participações

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own the majority of São Carlos Empreendimentos e Participações S.A.. This means they can collectively make decisions for the company. So they have a R$1.2b stake in this R$2.2b business. 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 holds a 18% stake in SCAR3. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that São Carlos Empreendimentos e Participações is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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. 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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