Rede D'Or São Luiz S.A. (BVMF:RDOR3) adds R$4.2b in market cap and insiders have a 34% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Rede D'Or São Luiz's growth, as seen by their sizeable ownership
• 56% of the business is held by the top 3 shareholders
• Institutional ownership in Rede D'Or São Luiz is 29%

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To get a sense of who is truly in control of Rede D'Or São Luiz S.A. (BVMF:RDOR3), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 5.8% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Rede D'Or São Luiz.

Check out our latest analysis for Rede D'Or São Luiz

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

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 Rede D'Or São Luiz 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. 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 Rede D'Or São Luiz's earnings history below. Of course, the future is what really matters.

Rede D'Or São Luiz is not owned by hedge funds. Jorge Moll Filho is currently the largest shareholder, with 23% of shares outstanding. With 18% and 15% of the shares outstanding respectively, GIC (Ventures) Pte. Ltd. and BTG Pactual Asset Management SA Distribuidora de Títulos e Valores Mobiliários are the second and third largest shareholders. Furthermore, CEO Paulo Moll is the owner of 5.7% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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. 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.

Our information suggests that insiders maintain a significant holding in Rede D'Or São Luiz S.A.. Insiders own R$26b worth of shares in the R$76b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Rede D'Or São Luiz. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Rede D'Or São Luiz better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.