Stock Analysis

Do Institutions Own BR Properties S.A. (BVMF:BRPR3) Shares?

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BOVESPA:BRPR3
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Every investor in BR Properties S.A. (BVMF:BRPR3) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.

BR Properties has a market capitalization of R$4.4b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about BR Properties.

Check out our latest analysis for BR Properties

ownership-breakdown
BOVESPA:BRPR3 Ownership Breakdown September 1st 2020

What Does The Institutional Ownership Tell Us About BR Properties?

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.

As you can see, institutional investors have a fair amount of stake in BR Properties. 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. 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 BR Properties' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BOVESPA:BRPR3 Earnings and Revenue Growth September 1st 2020

We note that hedge funds don't have a meaningful investment in BR Properties. The company's largest shareholder is GP Investments, Ltd., with ownership of 59%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Capital Research and Management Company is the second largest shareholder owning 5.0% of common stock, and Moerus Capital Management LLC holds about 4.2% of the company stock.

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 BR Properties

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, with a 18% stake in the company, will not 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 Equity Ownership

Private equity firms hold a 59% stake in BR Properties. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand BR Properties better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for BR Properties you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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