Is Iochpe-Maxion S.A.'s (BVMF:MYPK3) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
October 03, 2021
BOVESPA:MYPK3
Source: Shutterstock

A look at the shareholders of Iochpe-Maxion S.A. (BVMF:MYPK3) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Iochpe-Maxion is not a large company by global standards. It has a market capitalization of R$2.9b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Iochpe-Maxion.

See our latest analysis for Iochpe-Maxion

ownership-breakdown
BOVESPA:MYPK3 Ownership Breakdown October 3rd 2021

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

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

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BOVESPA:MYPK3 Earnings and Revenue Growth October 3rd 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Iochpe-Maxion. The company's largest shareholder is Alaska Investimentos LTDA., with ownership of 10%. With 10.0% and 7.1% of the shares outstanding respectively, Magliano SA CCVM and Ninety One UK Limited are the second and third largest shareholders.

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.

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 Iochpe-Maxion

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Iochpe-Maxion S.A.. Insiders have a R$348m stake in this R$2.9b business. I 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 holds a 26% stake in Iochpe-Maxion. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Iochpe-Maxion better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Iochpe-Maxion you should be aware of, and 1 of them is concerning.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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