Private companies in Jalles Machado S/A (BVMF:JALL3) are its biggest bettors, and their bets paid off as stock gained 13% last week

Key Insights

• The considerable ownership by private companies in Jalles Machado S/A indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 3 shareholders
• Insider ownership in Jalles Machado S/A is 18%

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To get a sense of who is truly in control of Jalles Machado S/A (BVMF:JALL3), 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 49% 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$856m market cap following a 13% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Jalles Machado S/A.

Check out our latest analysis for Jalles Machado S/A

What Does The Institutional Ownership Tell Us About Jalles Machado S/A?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Jalles Machado S/A. 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 Jalles Machado S/A, (below). Of course, keep in mind that there are other factors to consider, too.

Jalles Machado S/A is not owned by hedge funds. Grupo Otávio Lage is currently the largest shareholder, with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 3.9% of the stock. Clovis de Moraes, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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 51% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jalles Machado S/A

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.

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.

It seems insiders own a significant proportion of Jalles Machado S/A. Insiders have a R$158m stake in this R$856m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% 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 Company Ownership

We can see that Private Companies own 49%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jalles Machado S/A better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Jalles Machado S/A you should know about.

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.