Positive week for Ultrapar Participações S.A. (BVMF:UGPA3) institutional investors who lost 34% over the past year

Key Insights

• Significantly high institutional ownership implies Ultrapar Participações' stock price is sensitive to their trading actions
• 51% of the business is held by the top 5 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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Every investor in Ultrapar Participações S.A. (BVMF:UGPA3) should be aware of the most powerful shareholder groups. With 36% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would probably welcome last week's 3.4% increase in the share price after a year of 34% losses as a sign that returns may to begin trending higher.

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

View our latest analysis for Ultrapar Participações

What Does The Institutional Ownership Tell Us About Ultrapar Participações?

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.

Ultrapar Participações already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Ultrapar Participações, (below). Of course, keep in mind that there are other factors to consider, too.

Ultrapar Participações is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ultra S.A. Participações with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.9% and 7.8%, of the shares outstanding, respectively. In addition, we found that Marcos Lutz, the CEO has 1.7% of the shares allocated to their name.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

Insider Ownership Of Ultrapar Participações

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.

Our most recent data indicates that insiders own some shares in Ultrapar Participações S.A.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around R$401m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Ultrapar Participações. 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.

Private Company Ownership

Our data indicates that Private Companies hold 34%, of the company's shares. 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 Ultrapar Participações better, we need to consider many other factors. For instance, we've identified 3 warning signs for Ultrapar Participações that you should be aware of.

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.