Blau Farmacêutica S.A.'s (BVMF:BLAU3) most bullish insider is CEO Marcelo Hahn, and their holdings value went up by 10% last week

Key Insights

• Insiders appear to have a vested interest in Blau Farmacêutica's growth, as seen by their sizeable ownership
• Marcelo Hahn owns 83% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

We've discovered 2 warning signs about Blau Farmacêutica. View them for free.

To get a sense of who is truly in control of Blau Farmacêutica S.A. (BVMF:BLAU3), it is important to understand the ownership structure of the business. With 83% stake, individual insiders possess the maximum shares in the company. 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 scored the highest last week as the company hit R$2.5b market cap following a 10% gain in the stock.

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

View our latest analysis for Blau Farmacêutica

What Does The Institutional Ownership Tell Us About Blau Farmacêutica?

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.

Blau Farmacêutica already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Blau Farmacêutica's earnings history below. Of course, the future is what really matters.

Blau Farmacêutica is not owned by hedge funds. The company's CEO Marcelo Hahn is the largest shareholder with 83% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. For context, the second largest shareholder holds about 3.3% of the shares outstanding, followed by an ownership of 0.2% by the third-largest shareholder.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Blau Farmacêutica

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Blau Farmacêutica S.A.. This gives them effective control of the company. That means they own R$2.0b worth of shares in the R$2.5b 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

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Blau Farmacêutica is showing 2 warning signs in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.