Institutional owners may consider drastic measures as Terra Santa Propriedades Agrícolas S.A.'s (BVMF:LAND3) recent R$165m drop adds to long-term losses

Key Insights

• Significantly high institutional ownership implies Terra Santa Propriedades Agrícolas' stock price is sensitive to their trading actions
• The top 3 shareholders own 66% of the company
• Insiders own 25% of Terra Santa Propriedades Agrícolas

If you want to know who really controls Terra Santa Propriedades Agrícolas S.A. (BVMF:LAND3), then you'll have to look at the makeup of its share registry. With 33% 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 endured the highest losses after the company's share price fell by 10% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 48% for shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell Terra Santa Propriedades Agrícolas, which might have negative implications on individual investors.

Let's delve deeper into each type of owner of Terra Santa Propriedades Agrícolas, beginning with the chart below.

View our latest analysis for Terra Santa Propriedades Agrícolas

What Does The Institutional Ownership Tell Us About Terra Santa Propriedades Agrícolas?

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 Terra Santa Propriedades Agrícolas 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. 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 Terra Santa Propriedades Agrícolas' earnings history below. Of course, the future is what really matters.

Terra Santa Propriedades Agrícolas is not owned by hedge funds. Silvio de Araújo is currently the company's largest shareholder with 25% of shares outstanding. Laplace Investimentos Gestão de Recursos Ltd. is the second largest shareholder owning 23% of common stock, and Bonsucex Holding S.A. holds about 18% of the company stock.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Terra Santa Propriedades Agrícolas

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.

Our information suggests that insiders maintain a significant holding in Terra Santa Propriedades Agrícolas S.A.. Insiders have a R$363m stake in this R$1.4b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Terra Santa Propriedades Agrícolas. 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 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Terra Santa Propriedades Agrícolas better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Terra Santa Propriedades Agrícolas , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.