Private companies among Ultrapar Participações S.A.'s (BVMF:UGPA3) largest shareholders, saw gain in holdings value after stock jumped 3.4% last week

Key Insights

• The considerable ownership by private companies in Ultrapar Participações indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 6 shareholders
• Institutions own 32% of Ultrapar Participações

To get a sense of who is truly in control of Ultrapar Participações S.A. (BVMF:UGPA3), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit R$19b market cap following a 3.4% gain in the stock.

Let's delve deeper into each type of owner of Ultrapar Participações, beginning with the chart below.

View our latest analysis for Ultrapar Participações

What Does The Institutional Ownership Tell Us About Ultrapar Participações?

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 Ultrapar Participações does have institutional investors; and they hold a good portion of the company's stock. 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. 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.

Hedge funds don't have many shares in Ultrapar Participações. Ultra S.A. Participações is currently the largest shareholder, with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.9% and 5.6% of the stock. Additionally, the company's CEO Marcos Lutz directly holds 1.7% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Ultrapar Participações

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Ultrapar Participações S.A.. This is a big company, so it is good to see this level of alignment. Insiders own R$398m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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

We can see that Private Companies own 34%, of the shares on issue. 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 example, we've discovered 3 warning signs for Ultrapar Participações 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. 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.