Institutional investors must be pleased after a 12% gain last week that adds to Iochpe-Maxion S.A.'s (BVMF:MYPK3) one-year returns

Key Insights

• Significantly high institutional ownership implies Iochpe-Maxion's stock price is sensitive to their trading actions
• A total of 12 investors have a majority stake in the company with 51% ownership
• 13% of Iochpe-Maxion is held by insiders

If you want to know who really controls Iochpe-Maxion S.A. (BVMF:MYPK3), then you'll have to look at the makeup of its share registry. With 48% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit R$1.6b in market cap. One-year return to shareholders is currently 3.6% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Iochpe-Maxion.

View our latest analysis for Iochpe-Maxion

What Does The Institutional Ownership Tell Us About Iochpe-Maxion?

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.

As you can see, institutional investors have a fair amount of stake in Iochpe-Maxion. 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 Iochpe-Maxion's historic earnings and revenue below, but keep in mind there's always more to the story.

Iochpe-Maxion is not owned by hedge funds. Alaska Investimentos LTDA. is currently the company's largest shareholder with 10% of shares outstanding. Vokin Investimentos is the second largest shareholder owning 8.9% of common stock, and BlackRock, Inc. holds about 5.1% of the company stock.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 Iochpe-Maxion

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems insiders own a significant proportion of Iochpe-Maxion S.A.. It has a market capitalization of just R$1.6b, and insiders have R$202m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Iochpe-Maxion. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Iochpe-Maxion (of which 1 is potentially serious!) you should know about.

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.