Owning 34% in Rede D'Or São Luiz S.A. (BVMF:RDOR3) means that insiders are heavily invested in the company's future

Key Insights

• Rede D'Or São Luiz's significant insider ownership suggests inherent interests in company's expansion
• 56% of the business is held by the top 3 shareholders
• 31% of Rede D'Or São Luiz is held by Institutions

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Every investor in Rede D'Or São Luiz S.A. (BVMF:RDOR3) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Rede D'Or São Luiz, beginning with the chart below.

See our latest analysis for Rede D'Or São Luiz

What Does The Institutional Ownership Tell Us About Rede D'Or São Luiz?

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.

Rede D'Or São Luiz 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. 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 Rede D'Or São Luiz's historic earnings and revenue below, but keep in mind there's always more to the story.

Rede D'Or São Luiz is not owned by hedge funds. Jorge Moll Filho is currently the largest shareholder, with 23% of shares outstanding. GIC (Ventures) Pte. Ltd. is the second largest shareholder owning 18% of common stock, and BTG Pactual Asset Management SA Distribuidora de Títulos e Valores Mobiliários holds about 15% of the company stock. In addition, we found that Paulo Moll, the CEO has 5.7% of the shares allocated to their name.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Rede D'Or São Luiz

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Rede D'Or São Luiz S.A.. It is very interesting to see that insiders have a meaningful R$35b stake in this R$100b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rede D'Or São Luiz. 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.