Insiders the biggest winners as São Carlos Empreendimentos e Participações S.A.'s (BVMF:SCAR3) market cap rises to R$1.2b

Key Insights

• São Carlos Empreendimentos e Participações' significant insider ownership suggests inherent interests in company's expansion
• 53% of the business is held by the top 8 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in São Carlos Empreendimentos e Participações S.A. (BVMF:SCAR3) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit R$1.2b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of São Carlos Empreendimentos e Participações, beginning with the chart below.

See our latest analysis for São Carlos Empreendimentos e Participações

What Does The Institutional Ownership Tell Us About São Carlos Empreendimentos e Participações?

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.

Less than 5% of São Carlos Empreendimentos e Participações is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

It looks like hedge funds own 5.4% of São Carlos Empreendimentos e Participações shares. 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. Paulo Lemann is currently the company's largest shareholder with 9.3% of shares outstanding. The second and third largest shareholders are Marcel Telles and Christian Van Hoegaerden Herrmann Telles, with an equal amount of shares to their name at 8.4%.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of São Carlos Empreendimentos e Participações

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the São Carlos Empreendimentos e Participações S.A. stock. This gives them a lot of power. Given it has a market cap of R$1.2b, that means they have R$694m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 30% 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.

Private Company Ownership

Our data indicates that Private Companies hold 3.9%, of the company's shares. 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 São Carlos Empreendimentos e Participações better, we need to consider many other factors. Be aware that São Carlos Empreendimentos e Participações is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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.

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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.