Great week for Pet Center Comércio e Participações S.A. (BVMF:PETZ3) institutional investors after losing 24% over the previous year

Key Insights

• Given the large stake in the stock by institutions, Pet Center Comércio e Participações' stock price might be vulnerable to their trading decisions
• A total of 5 investors have a majority stake in the company with 54% ownership
• 30% of Pet Center Comércio e Participações is held by insiders

If you want to know who really controls Pet Center Comércio e Participações S.A. (BVMF:PETZ3), then you'll have to look at the makeup of its share registry. With 42% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors would appreciate the 34% increase in share price last week, given their one-year losses have totalled a disappointing 24%.

Let's take a closer look to see what the different types of shareholders can tell us about Pet Center Comércio e Participações.

See our latest analysis for Pet Center Comércio e Participações

What Does The Institutional Ownership Tell Us About Pet Center Comércio 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.

We can see that Pet Center Comércio e Participações does have institutional investors; and they hold a good portion of the company's stock. 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 Pet Center Comércio e Participações' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Pet Center Comércio e Participações. With a 30% stake, CEO Sergio Zimerman is the largest shareholder. For context, the second largest shareholder holds about 8.6% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Pet Center Comércio 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.

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 insiders own a significant proportion of Pet Center Comércio e Participações S.A.. It has a market capitalization of just R$2.2b, and insiders have R$645m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% 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.

Public Company Ownership

It appears to us that public companies own 8.6% of Pet Center Comércio e Participações. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 learn about the 3 warning signs we've spotted with Pet Center Comércio e Participações (including 1 which doesn't sit too well with us) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.