Smartfit Escola de Ginástica e Dança S.A.'s (BVMF:SMFT3) market cap touched R$11b last week, benefiting both private equity firms who own 33% as well as institutions

Key Insights

• Smartfit Escola de Ginástica e Dança's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• 60% of the business is held by the top 3 shareholders
• Institutional ownership in Smartfit Escola de Ginástica e Dança is 31%

If you want to know who really controls Smartfit Escola de Ginástica e Dança S.A. (BVMF:SMFT3), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 33% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 5.6% increase in the stock price last week, private equity firms profited the most, but institutions who own 31% stock also stood to gain from the increase.

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

View 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.

As you can see, institutional investors have a fair amount of stake in Smartfit Escola de Ginástica e Dança. 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. 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 Smartfit Escola de Ginástica e Dança, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Smartfit Escola de Ginástica e Dança. Patria Investimentos Ltda is currently the largest shareholder, with 33% of shares outstanding. With 15% and 12% of the shares outstanding respectively, Corona Family S.R.L. and Canada Pension Plan Investment Board are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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. 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.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Smartfit Escola de Ginástica e Dança. 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

We can see that Private Companies own 24%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Smartfit Escola de Ginástica e Dança you should know about.

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.