Recent 5.3% pullback would hurt Vivara Participações S.A. (BVMF:VIVA3) insiders

Key Insights

• Insiders appear to have a vested interest in Vivara Participações' growth, as seen by their sizeable ownership
• 52% of the business is held by the top 5 shareholders
• Institutional ownership in Vivara Participações is 27%

To get a sense of who is truly in control of Vivara Participações S.A. (BVMF:VIVA3), it is important to understand the ownership structure of the business. With 46% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to R$5.2b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Vivara Participações.

View our latest analysis for Vivara Participações

What Does The Institutional Ownership Tell Us About Vivara Participações?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Vivara Participações does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Vivara Participações' historic earnings and revenue below, but keep in mind there's always more to the story.

Vivara Participações is not owned by hedge funds. Our data shows that Nelson Kaufman is the largest shareholder with 26% of shares outstanding. With 14% and 5.1% of the shares outstanding respectively, Marina Kaufman Netto and Truxt Investimentos Ltda are the second and third largest shareholders. Marina Kaufman Netto, who is the second-largest shareholder, also happens to hold the title of Member of Management Board.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Vivara Participações

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own a reasonable proportion of Vivara Participações S.A.. It is very interesting to see that insiders have a meaningful R$2.4b stake in this R$5.2b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Vivara Participações. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.