Do Insiders Own Lots Of Shares In Vulcabras Azaleia S.A. (BVMF:VULC3)?

By
Simply Wall St
Published
November 11, 2021
BOVESPA:VULC3
Source: Shutterstock

The big shareholder groups in Vulcabras Azaleia S.A. (BVMF:VULC3) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Vulcabras Azaleia is a smaller company with a market capitalization of R$2.4b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Vulcabras Azaleia.

See our latest analysis for Vulcabras Azaleia

ownership-breakdown
BOVESPA:VULC3 Ownership Breakdown November 12th 2021

What Does The Institutional Ownership Tell Us About Vulcabras Azaleia?

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.

Vulcabras Azaleia 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 Vulcabras Azaleia, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
BOVESPA:VULC3 Earnings and Revenue Growth November 12th 2021

Hedge funds don't have many shares in Vulcabras Azaleia. The company's largest shareholder is Gianpega Negócios e Participações S.A., with ownership of 32%. With 15% and 11% of the shares outstanding respectively, Gold Negócios e Participações Ltda. and BTG Pactual Asset Management S.A. Distribuidora de Títulos e Valores Mobiliários are the second and third largest shareholders. In addition, we found that Pedro Bartelle, the CEO has 4.0% of the shares allocated to their name.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Vulcabras Azaleia

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.

I can report that insiders do own shares in Vulcabras Azaleia S.A.. It has a market capitalization of just R$2.4b, and insiders have R$240m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 20% stake in Vulcabras Azaleia. 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 47%, of the Vulcabras Azaleia stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Take risks for example - Vulcabras Azaleia has 1 warning sign we think you should be aware of.

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.

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