What Type Of Shareholders Make Up Westwing Comércio Varejista S.A.'s (BVMF:WEST3) Share Registry?

By
Simply Wall St
Published
August 25, 2021
BOVESPA:WEST3
Source: Shutterstock

The big shareholder groups in Westwing Comércio Varejista S.A. (BVMF:WEST3) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

Westwing Comércio Varejista is a smaller company with a market capitalization of R$845m, so it may still be flying under the radar of many institutional investors. 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 Westwing Comércio Varejista.

View our latest analysis for Westwing Comércio Varejista

ownership-breakdown
BOVESPA:WEST3 Ownership Breakdown August 26th 2021

What Does The Institutional Ownership Tell Us About Westwing Comércio Varejista?

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.

We can see that Westwing Comércio Varejista 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Westwing Comércio Varejista's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
BOVESPA:WEST3 Earnings and Revenue Growth August 26th 2021

Westwing Comércio Varejista is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Fornax Assessoria Ltda. with 26% of shares outstanding. For context, the second largest shareholder holds about 7.0% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Westwing Comércio Varejista

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Westwing Comércio Varejista S.A. insiders own under 1% of the company. It seems the board members have no more than R$5.8m worth of shares in the R$845m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, with a 45% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

Private equity firms hold a 26% stake in Westwing Comércio Varejista. 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:

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. Be aware that Westwing Comércio Varejista is showing 1 warning sign in our investment analysis , you should know about...

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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