Brisanet Serviços de Telecomunicações S.A.'s (BVMF:BRST3) most bullish insider, CEO Jose Nogueira must be pleased with the recent 11% gain

Key Insights

• Insiders appear to have a vested interest in Brisanet Serviços de Telecomunicações' growth, as seen by their sizeable ownership
• 50% of the business is held by the top 3 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

We've discovered 3 warning signs about Brisanet Serviços de Telecomunicações. View them for free.

A look at the shareholders of Brisanet Serviços de Telecomunicações S.A. (BVMF:BRST3) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 81% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 11% gain.

In the chart below, we zoom in on the different ownership groups of Brisanet Serviços de Telecomunicações.

Check out our latest analysis for Brisanet Serviços de Telecomunicações

What Does The Lack Of Institutional Ownership Tell Us About Brisanet Serviços de Telecomunicações?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Brisanet Serviços de Telecomunicações might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Brisanet Serviços de Telecomunicações is not owned by hedge funds. The company's CEO Jose Nogueira is the largest shareholder with 34% of shares outstanding. The second and third largest shareholders are Joao Estevam and Jordao Nogueira, with an equal amount of shares to their name at 8.2%. Interestingly, the second-largest shareholder, Joao Estevam is also Chief Operating Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Brisanet Serviços de Telecomunicações

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.

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 insiders own more than half of Brisanet Serviços de Telecomunicações S.A.. This gives them effective control of the company. Given it has a market cap of R$1.2b, that means they have R$1.0b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Brisanet Serviços de Telecomunicações. 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.

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 Brisanet Serviços de Telecomunicações (including 2 which make us uncomfortable) .

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.