Institutional investors have a lot riding on GPS Participações e Empreendimentos S.A. (BVMF:GGPS3) with 37% ownership

Key Insights

• Significantly high institutional ownership implies GPS Participações e Empreendimentos' stock price is sensitive to their trading actions
• 51% of the business is held by the top 8 shareholders
• Insider ownership in GPS Participações e Empreendimentos is 37%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

A look at the shareholders of GPS Participações e Empreendimentos S.A. (BVMF:GGPS3) can tell us which group is most powerful. With 37% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained R$555m in market cap last week. The one-year return on investment is currently 26% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of GPS Participações e Empreendimentos, beginning with the chart below.

View our latest analysis for GPS Participações e Empreendimentos

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

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.

GPS Participações e Empreendimentos already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 GPS Participações e Empreendimentos, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 5.7% of GPS Participações e Empreendimentos shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. José Caetano Lacerda is currently the company's largest shareholder with 14% of shares outstanding. With 6.9% and 5.7% of the shares outstanding respectively, Canada Pension Plan Investment Board and Squadra Investimentos Gestao de Recursos LTDA are the second and third largest shareholders. Additionally, the company's CEO Luis Carlos Romero directly holds 5.3% of the total shares outstanding.

We did some more digging and found that 8 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 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 GPS 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in GPS Participações e Empreendimentos S.A.. It has a market capitalization of just R$13b, and insiders have R$4.9b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 4.2%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 GPS Participações e Empreendimentos is showing 1 warning sign in our investment analysis , you should know about...

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.

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.