Companhia de Saneamento de Minas Gerais' (BVMF:CSMG3) market cap surged R$413m last week, state or government who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by state or government in Companhia de Saneamento de Minas Gerais indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is State of Minas Gerais, Brazil. with a 50% stake
• 17% of Companhia de Saneamento de Minas Gerais is held by Institutions

To get a sense of who is truly in control of Companhia de Saneamento de Minas Gerais (BVMF:CSMG3), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, state or government benefitted the most after the company's market cap rose by R$413m last week.

Let's delve deeper into each type of owner of Companhia de Saneamento de Minas Gerais, beginning with the chart below.

View our latest analysis for Companhia de Saneamento de Minas Gerais

What Does The Institutional Ownership Tell Us About Companhia de Saneamento de Minas Gerais?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Companhia de Saneamento de Minas Gerais 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Companhia de Saneamento de Minas Gerais, (below). Of course, keep in mind that there are other factors to consider, too.

Companhia de Saneamento de Minas Gerais is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is State of Minas Gerais, Brazil. with 50% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 5.0% and 2.0%, of the shares outstanding, respectively.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Companhia de Saneamento de Minas Gerais

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.

We note our data does not show any board members 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

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Companhia de Saneamento de Minas Gerais. 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. Case in point: We've spotted 3 warning signs for Companhia de Saneamento de Minas Gerais you should be aware of, and 1 of them doesn't sit too well with us.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.