Retail investors who hold 52% of Companhia Brasileira De Distribuicao (BVMF:PCAR3) gained 11%, institutions profited as well

Key Insights

• Significant control over Companhia Brasileira De Distribuicao by retail investors implies that the general public has more power to influence management and governance-related decisions
• 47% of the business is held by the top 25 shareholders
• Institutions own 39% of Companhia Brasileira De Distribuicao

To get a sense of who is truly in control of Companhia Brasileira De Distribuicao (BVMF:PCAR3), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 52% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 11% increase in the stock price last week, retail investors profited the most, but institutions who own 39% stock also stood to gain from the increase.

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

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

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.

As you can see, institutional investors have a fair amount of stake in Companhia Brasileira De Distribuicao. 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.

We note that hedge funds don't have a meaningful investment in Companhia Brasileira De Distribuicao. SPX Gestão de Recursos Ltda is currently the company's largest shareholder with 9.9% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.1% and 5.5% of the stock. Ronaldo dos Santos Pereira, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Companhia Brasileira De Distribuicao

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Companhia Brasileira De Distribuicao. It has a market capitalization of just R$1.5b, and insiders have R$85m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Companhia Brasileira De Distribuicao, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 3.2%, of the Companhia Brasileira De Distribuicao 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 Companhia Brasileira De Distribuicao better, we need to consider many other factors. Be aware that Companhia Brasileira De Distribuicao is showing 4 warning signs in our investment analysis , and 2 of those don't sit too well with us...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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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.