Private equity firms invested in Allied Tecnologia S.A. (BVMF:ALLD3) up 17% last week, insiders too were rewarded

Key Insights

• Allied Tecnologia's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• BRL Trust Investimentos Ltda. owns 65% of the company
• Insiders own 18% of Allied Tecnologia

To get a sense of who is truly in control of Allied Tecnologia S.A. (BVMF:ALLD3), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 65% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 17% increase in the stock price last week, private equity firms profited the most, but insiders who own 18% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Allied Tecnologia, beginning with the chart below.

See our latest analysis for Allied Tecnologia

What Does The Institutional Ownership Tell Us About Allied Tecnologia?

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.

Less than 5% of Allied Tecnologia 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. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Allied Tecnologia is not owned by hedge funds. BRL Trust Investimentos Ltda. is currently the company's largest shareholder with 65% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder.

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

Insider Ownership Of Allied Tecnologia

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.

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.

It seems insiders own a significant proportion of Allied Tecnologia S.A.. It has a market capitalization of just R$746m, and insiders have R$131m 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 14% 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 Equity Ownership

With an ownership of 65%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Allied Tecnologia that you should be aware of before investing here.

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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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.