The recent pullback must have dismayed Armac Locação, Logística e Serviços S.A. (BVMF:ARML3) insiders who own 50% of the company

Key Insights

• Insiders appear to have a vested interest in Armac Locação Logística e Serviços' growth, as seen by their sizeable ownership
• The top 3 shareholders own 56% of the company
• Institutional ownership in Armac Locação Logística e Serviços is 39%

To get a sense of who is truly in control of Armac Locação, Logística e Serviços S.A. (BVMF:ARML3), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% 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 following last week's 9.9% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Armac Locação Logística e Serviços.

View our latest analysis for Armac Locação Logística e Serviços

What Does The Institutional Ownership Tell Us About Armac Locação Logística e Serviços?

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 Armac Locação Logística e Serviços. 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. 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 Armac Locação Logística e Serviços' historic earnings and revenue below, but keep in mind there's always more to the story.

Armac Locação Logística e Serviços is not owned by hedge funds. Our data shows that JP Morgan Asset Management is the largest shareholder with 23% of shares outstanding. The second and third largest shareholders are Fernando Pereira Aragão and José Pereira Aragão, with an equal amount of shares to their name at 17%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Armac Locação Logística e Serviços

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.

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 information suggests that insiders own more than half of Armac Locação, Logística e Serviços S.A.. This gives them effective control of the company. That means they own R$1.5b worth of shares in the R$3.0b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Armac Locação Logística e Serviços. 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. To that end, you should learn about the 2 warning signs we've spotted with Armac Locação Logística e Serviços (including 1 which is potentially serious) .

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.