Private companies among Marfrig Global Foods S.A.'s (BVMF:MRFG3) largest shareholders, saw gain in holdings value after stock jumped 3.9% last week

Key Insights

• Marfrig Global Foods' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is MMS Participações S.A. with a 57% stake
• Insider ownership in Marfrig Global Foods is 11%

To get a sense of who is truly in control of Marfrig Global Foods S.A. (BVMF:MRFG3), 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 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit R$13b market cap following a 3.9% gain in the stock.

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

See our latest analysis for Marfrig Global Foods

What Does The Institutional Ownership Tell Us About Marfrig Global Foods?

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.

Marfrig Global Foods 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Marfrig Global Foods' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Marfrig Global Foods. Looking at our data, we can see that the largest shareholder is MMS Participações S.A. with 57% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 6.8% of the shares outstanding, followed by an ownership of 4.5% by the third-largest shareholder. Two of the top three shareholders happen to be Controller and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

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 Marfrig Global Foods

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.

It seems insiders own a significant proportion of Marfrig Global Foods S.A.. Insiders own R$1.4b worth of shares in the R$13b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Marfrig Global Foods. 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 57%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Marfrig Global Foods (1 is concerning) 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.