Institutional investors control 45% of Direcional Engenharia S.A. (BVMF:DIRR3) and were rewarded last week after stock increased 6.5%

Key Insights

• Significantly high institutional ownership implies Direcional Engenharia's stock price is sensitive to their trading actions
• The top 6 shareholders own 51% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

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A look at the shareholders of Direcional Engenharia S.A. (BVMF:DIRR3) can tell us which group is most powerful. With 45% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 6.5% last week. One-year return to shareholders is currently 78% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about Direcional Engenharia.

Check out our latest analysis for Direcional Engenharia

What Does The Institutional Ownership Tell Us About Direcional Engenharia?

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.

Direcional Engenharia 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. 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 Direcional Engenharia's earnings history below. Of course, the future is what really matters.

Direcional Engenharia is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Phph Holding Ltda. with 13% of shares outstanding. With 13% and 8.5% of the shares outstanding respectively, Share Holding Ltda and Wealth High Governance Capital Ltda. are the second and third largest shareholders. In addition, we found that Ricardo Valadares Gontijo, the CEO has 1.4% of the shares allocated to their name.

We did some more digging and found that 6 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 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 Direcional Engenharia

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.

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 most recent data indicates that insiders own some shares in Direcional Engenharia S.A.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around R$191m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Direcional Engenharia. 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

Our data indicates that Private Companies hold 34%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Direcional Engenharia is showing 2 warning signs in our investment analysis , you should know about...

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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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.