The recent 4.7% gain must have brightened CEO Tercio Junior's week, Ambipar Participações e Empreendimentos S.A.'s (BVMF:AMBP3) most bullish insider

Key Insights

• Significant insider control over Ambipar Participações e Empreendimentos implies vested interests in company growth
• Tercio Junior owns 73% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Ambipar Participações e Empreendimentos S.A. (BVMF:AMBP3) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 77% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit R$21b market cap following a 4.7% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Ambipar Participações e Empreendimentos.

See our latest analysis for Ambipar Participações e Empreendimentos

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

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.

We can see that Ambipar Participações e Empreendimentos 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 Ambipar Participações e Empreendimentos, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Ambipar Participações e Empreendimentos. With a 73% stake, CEO Tercio Junior is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Meanwhile, the second and third largest shareholders, hold 4.1% and 1.1%, of the shares outstanding, respectively.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Ambipar Participações e Empreendimentos

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own the majority of Ambipar Participações e Empreendimentos S.A.. This means they can collectively make decisions for the company. Given it has a market cap of R$21b, that means insiders have a whopping R$16b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ambipar Participações e Empreendimentos. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Ambipar Participações e Empreendimentos better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Ambipar Participações e Empreendimentos 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.