Neogrid Participações S.A. (BVMF:NGRD3) institutional owners may be pleased with recent gains after 76% loss over the past year

By
Simply Wall St
Published
January 24, 2022
BOVESPA:NGRD3
Source: Shutterstock

If you want to know who really controls Neogrid Participações S.A. (BVMF:NGRD3), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would appreciate the 10% increase in share prices last week, given their one-year returns have been disappointing at 76%.

In the chart below, we zoom in on the different ownership groups of Neogrid Participações.

Check out our latest analysis for Neogrid Participações

ownership-breakdown
BOVESPA:NGRD3 Ownership Breakdown January 24th 2022

What Does The Institutional Ownership Tell Us About Neogrid Participações?

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.

Neogrid 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. 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 Neogrid Participações' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
BOVESPA:NGRD3 Earnings and Revenue Growth January 24th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Neogrid Participações. The company's largest shareholder is Planner Trustee DTVM Ltda, with ownership of 51%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 2.5% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder.

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 Neogrid 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.

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.

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, who are usually individual investors, hold a 40% stake in Neogrid Participações. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Neogrid Participações is showing 2 warning signs in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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