Institutional investors must be pleased after a 9.4% gain last week that adds to Cyrela Brazil Realty S.A. Empreendimentos e Participações' (BVMF:CYRE3) one-year returns

Key Insights

• Significantly high institutional ownership implies Cyrela Brazil Realty Empreendimentos e Participações' stock price is sensitive to their trading actions
• A total of 9 investors have a majority stake in the company with 50% ownership
• Insider ownership in Cyrela Brazil Realty Empreendimentos e Participações is 24%

Every investor in Cyrela Brazil Realty S.A. Empreendimentos e Participações (BVMF:CYRE3) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit R$7.8b in market cap. One-year return to shareholders is currently 6.3% and last week’s gain was the icing on the cake.

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

View our latest analysis for Cyrela Brazil Realty Empreendimentos e Participações

What Does The Institutional Ownership Tell Us About Cyrela Brazil Realty Empreendimentos e Participações?

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.

Cyrela Brazil Realty Empreendimentos e Participações 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 Cyrela Brazil Realty Empreendimentos e Participações' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Cyrela Brazil Realty Empreendimentos e Participações. Elie Horn is currently the largest shareholder, with 24% of shares outstanding. For context, the second largest shareholder holds about 6.5% of the shares outstanding, followed by an ownership of 6.1% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Cyrela Brazil Realty Empreendimentos e Participações

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 information suggests that insiders maintain a significant holding in Cyrela Brazil Realty S.A. Empreendimentos e Participações. It is very interesting to see that insiders have a meaningful R$1.9b stake in this R$7.8b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 6.1%, of the Cyrela Brazil Realty Empreendimentos e Participações stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Cyrela Brazil Realty Empreendimentos e Participações better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.