With 48% ownership, Multilaser Industrial S.A. (BVMF:MLAS3) insiders have a lot at stake

Key Insights

• Significant insider control over Multilaser Industrial implies vested interests in company growth
• 70% of the business is held by the top 2 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Multilaser Industrial S.A. (BVMF:MLAS3) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Multilaser Industrial regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Multilaser Industrial.

View our latest analysis for Multilaser Industrial

What Does The Institutional Ownership Tell Us About Multilaser Industrial?

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.

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

Hedge funds don't have many shares in Multilaser Industrial. With a 41% stake, CEO Alexandre Ostrowiecki is the largest shareholder. With 28% and 6.1% of the shares outstanding respectively, Dragon Gem Corp and Edward Feder are the second and third largest shareholders. Interestingly, the third-largest shareholder, Edward Feder is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 70% stake.

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 Multilaser Industrial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Multilaser Industrial S.A.. It has a market capitalization of just R$1.6b, and insiders have R$785m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Multilaser Industrial. 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 Company Ownership

It seems that Private Companies own 28%, of the Multilaser Industrial stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 be aware of the 1 warning sign we've spotted with Multilaser Industrial .

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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com