Institutional investors must be pleased after a 13% gain last week that adds to Ser Educacional S.A.'s (BVMF:SEER3) one-year returns

Key Insights

• Given the large stake in the stock by institutions, Ser Educacional's stock price might be vulnerable to their trading decisions
• Wealth High Governance Capital Ltda. owns 59% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Ser Educacional S.A. (BVMF:SEER3) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 87% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit R$788m in market cap. One-year return to shareholders is currently 3.2% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about Ser Educacional.

See our latest analysis for Ser Educacional

What Does The Institutional Ownership Tell Us About Ser Educacional?

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.

We can see that Ser Educacional does have institutional investors; and they hold a good portion of the company's stock. 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 Ser Educacional, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Ser Educacional is not owned by hedge funds. Wealth High Governance Capital Ltda. is currently the largest shareholder, with 59% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 13% and 5.8% of the shares outstanding respectively, Vokin Investimentos and Cape Ann Asset Management Limited are the second and third largest shareholders.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ser Educacional

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. 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 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 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ser Educacional. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ser Educacional better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Ser Educacional (at least 1 which is significant) , and understanding them should be part of your investment process.

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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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.