Private equity firms who hold 33% of Smartfit Escola de Ginástica e Dança S.A. (BVMF:SMFT3) gained 6.9%, institutions profited as well

Key Insights

• Significant control over Smartfit Escola de Ginástica e Dança by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 60% of the company
• Institutional ownership in Smartfit Escola de Ginástica e Dança is 32%

A look at the shareholders of Smartfit Escola de Ginástica e Dança S.A. (BVMF:SMFT3) can tell us which group is most powerful. The group holding the most number of shares in the company, around 33% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

Private equity firms gained the most after market cap touched R$11b last week, while institutions who own 32% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Smartfit Escola de Ginástica e Dança.

Check out our latest analysis for Smartfit Escola de Ginástica e Dança

What Does The Institutional Ownership Tell Us About Smartfit Escola de Ginástica e Dança?

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.

We can see that Smartfit Escola de Ginástica e Dança does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Smartfit Escola de Ginástica e Dança's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Smartfit Escola de Ginástica e Dança. Patria Investimentos Ltda is currently the company's largest shareholder with 33% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 12% of the stock.

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. 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 Smartfit Escola de Ginástica e Dança

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.

Our data cannot confirm that board members are 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

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 33% stake in Smartfit Escola de Ginástica e Dança. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 24%, of the Smartfit Escola de Ginástica e Dança 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:

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. To that end, you should learn about the 2 warning signs we've spotted with Smartfit Escola de Ginástica e Dança (including 1 which is concerning) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.