What You Need To Know About CVC Brasil Operadora e Agência de Viagens S.A.'s (BVMF:CVCB3) Investor Composition

By
Simply Wall St
Published
November 25, 2020

A look at the shareholders of CVC Brasil Operadora e Agência de Viagens S.A. (BVMF:CVCB3) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

CVC Brasil Operadora e Agência de Viagens is a smaller company with a market capitalization of R$2.8b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see 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 CVC Brasil Operadora e Agência de Viagens.

View our latest analysis for CVC Brasil Operadora e Agência de Viagens

BOVESPA:CVCB3 Ownership Breakdown November 25th 2020

What Does The Institutional Ownership Tell Us About CVC Brasil Operadora e Agência de Viagens?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in CVC Brasil Operadora e Agência de Viagens. 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. 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 CVC Brasil Operadora e Agência de Viagens' historic earnings and revenue below, but keep in mind there's always more to the story.

BOVESPA:CVCB3 Earnings and Revenue Growth November 25th 2020

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in CVC Brasil Operadora e Agência de Viagens. The company's largest shareholder is Opportunity Asset Administração de Recursos de Terceiros Ltda, with ownership of 8.8%. Meanwhile, the second and third largest shareholders, hold 4.5% and 4.3%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 23 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. 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 CVC Brasil Operadora e Agência de Viagens

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 39% ownership, the general public have some degree of sway over CVC Brasil Operadora e Agência de Viagens. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CVC Brasil Operadora e Agência de Viagens better, we need to consider many other factors. For example, we've discovered 4 warning signs for CVC Brasil Operadora e Agência de Viagens (1 is significant!) that you should be aware of before investing here.

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. 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.
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