In the wake of LOG Commercial Properties e Participações S.A.'s (BVMF:LOGG3) latest R$192m market cap drop, institutional owners may be forced to take severe actions

Key Insights

• Institutions' substantial holdings in LOG Commercial Properties e Participações implies that they have significant influence over the company's share price
• 55% of the business is held by the top 4 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls LOG Commercial Properties e Participações S.A. (BVMF:LOGG3), then you'll have to look at the makeup of its share registry. With 45% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by R$192m. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 10.0% might not go down well especially with this category of shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell LOG Commercial Properties e Participações, which might have negative implications on individual investors.

In the chart below, we zoom in on the different ownership groups of LOG Commercial Properties e Participações.

See our latest analysis for LOG Commercial Properties e Participações

What Does The Institutional Ownership Tell Us About LOG Commercial Properties e Participações?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

LOG Commercial Properties e Participações 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of LOG Commercial Properties e Participações, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 6.8% of LOG Commercial Properties e Participações. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Conedi Participações Ltda. is currently the largest shareholder, with 28% of shares outstanding. FMR LLC is the second largest shareholder owning 11% of common stock, and Bradesco Asset Management S.A. Distribuidora de Títulos e Valores Mobiliários holds about 8.8% of the company stock.

On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 LOG Commercial Properties e Participações

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.

Shareholders would probably be interested to learn that insiders own shares in LOG Commercial Properties e Participações S.A.. In their own names, insiders own R$89m worth of stock in the R$1.6b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LOG Commercial Properties e Participações. 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.

Private Company Ownership

We can see that Private Companies own 28%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for LOG Commercial Properties e Participações (2 don't sit too well with us!) that you should be aware of before investing here.

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.