Stock Analysis

Companhia Brasileira De Distribuicao (BVMF:PCAR3) institutional owners may be pleased with recent gains after 39% loss over the past year

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Key Insights

  • Given the large stake in the stock by institutions, Companhia Brasileira De Distribuicao's stock price might be vulnerable to their trading decisions
  • 54% of the business is held by the top 3 shareholders
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Companhia Brasileira De Distribuicao (BVMF:PCAR3) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors would probably welcome last week's 7.4% increase in share prices after a year of 39% losses as a sign that returns are likely to begin trending higher.

In the chart below, we zoom in on the different ownership groups of Companhia Brasileira De Distribuicao.

View our latest analysis for Companhia Brasileira De Distribuicao

BOVESPA:PCAR3 Ownership Breakdown March 29th 2023

What Does The Institutional Ownership Tell Us About Companhia Brasileira De Distribuicao?

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 Companhia Brasileira De Distribuicao does have institutional investors; and they hold a good portion of the company's stock. 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 Companhia Brasileira De Distribuicao's earnings history below. Of course, the future is what really matters.

BOVESPA:PCAR3 Earnings and Revenue Growth March 29th 2023

We note that hedge funds don't have a meaningful investment in Companhia Brasileira De Distribuicao. Casino, Guichard-Perrachon S.A. is currently the company's largest shareholder with 41% of shares outstanding. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Companhia Brasileira De Distribuicao

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.

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 data suggests that insiders own under 1% of Companhia Brasileira De Distribuicao in their own names. It appears that the board holds about R$14.4 worth of stock. This compares to a market capitalization of R$3.9b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 18% 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.

Public Company Ownership

We can see that public companies hold 41% of the Companhia Brasileira De Distribuicao shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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.

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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