Terra Santa Propriedades Agrícolas S.A.'s (BVMF:LAND3) market cap dropped R$177m last week; individual investors who hold 45% were hit as were institutions

Key Insights

• Significant control over Terra Santa Propriedades Agrícolas by private companies implies that the general public has more power to influence management and governance-related decisions
• 68% of the business is held by the top 2 shareholders
• Institutional ownership in Terra Santa Propriedades Agrícolas is 32%

Our free stock report includes 1 warning sign investors should be aware of before investing in Terra Santa Propriedades Agrícolas. Read for free now.

A look at the shareholders of Terra Santa Propriedades Agrícolas S.A. (BVMF:LAND3) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 32% came under pressure after market cap dropped to R$1.3b last week,private companies took the most losses.

In the chart below, we zoom in on the different ownership groups of Terra Santa Propriedades Agrícolas.

See our latest analysis for Terra Santa Propriedades Agrícolas

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

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.

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. 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 Terra Santa Propriedades Agrícolas' historic earnings and revenue below, but keep in mind there's always more to the story.

Terra Santa Propriedades Agrícolas is not owned by hedge funds. The company's largest shareholder is Bonsucex Holding S.A., with ownership of 45%. With 23% and 7.6% of the shares outstanding respectively, Laplace Investimentos Gestão de Recursos Ltd. and JP Morgan Asset Management are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 68% stake.

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. 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. 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.

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 some shares in Terra Santa Propriedades Agrícolas S.A.. In their own names, insiders own R$67m worth of stock in the R$1.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 45%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Terra Santa Propriedades Agrícolas .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.