M. Dias Branco S.A. Indústria e Comércio de Alimentos' (BVMF:MDIA3) recent 4.3% pullback adds to one-year year losses, institutional owners may take drastic measures

Every investor in M. Dias Branco S.A. Indústria e Comércio de Alimentos (BVMF:MDIA3) should be aware of the most powerful shareholder groups. With 72% 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.

And institutional investors saw their holdings value drop by 4.3% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 3.7% might not go down well especially with this category of shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell M. Dias Branco Indústria e Comércio de Alimentos which might hurt individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about M. Dias Branco Indústria e Comércio de Alimentos.

Check out our latest analysis for M. Dias Branco Indústria e Comércio de Alimentos

What Does The Institutional Ownership Tell Us About M. Dias Branco Indústria e Comércio de Alimentos?

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.

We can see that M. Dias Branco Indústria e Comércio de Alimentos does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see M. Dias Branco Indústria e Comércio de Alimentos' historic earnings and revenue below, but keep in mind there's always more to the story.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in M. Dias Branco Indústria e Comércio de Alimentos. The company's largest shareholder is Itaú Distribuidora de Títulos e Valores Mobiliários S.A., with ownership of 64%. This implies that they have majority interest control of the future of the company. Franklin Resources, Inc. is the second largest shareholder owning 1.8% of common stock, and The Vanguard Group, Inc. holds about 1.4% of the company stock.

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 M. Dias Branco Indústria e Comércio de Alimentos

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.

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.

We note our data does not show any board members 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, who are usually individual investors, hold a 28% stake in M. Dias Branco Indústria e Comércio de Alimentos. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with M. Dias Branco Indústria e Comércio de Alimentos , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.