Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) is favoured by institutional owners who hold 42% of the company

Key Insights

• Significantly high institutional ownership implies Companhia de Saneamento Básico do Estado de São Paulo - SABESP's stock price is sensitive to their trading actions
• The top 8 shareholders own 50% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's take a closer look to see what the different types of shareholders can tell us about Companhia de Saneamento Básico do Estado de São Paulo - SABESP.

View our latest analysis for Companhia de Saneamento Básico do Estado de São Paulo - SABESP

What Does The Institutional Ownership Tell Us About Companhia de Saneamento Básico do Estado de São Paulo - SABESP?

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.

As you can see, institutional investors have a fair amount of stake in Companhia de Saneamento Básico do Estado de São Paulo - SABESP. 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 Básico do Estado de São Paulo - SABESP, (below). Of course, keep in mind that there are other factors to consider, too.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP is not owned by hedge funds. Our data shows that Government of the State of Sao Paulo is the largest shareholder with 18% of shares outstanding. With 15% and 5.7% of the shares outstanding respectively, Equatorial S.A. and BlackRock, Inc. are the second and third largest shareholders.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Companhia de Saneamento Básico do Estado de São Paulo - SABESP

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Companhia de Saneamento Básico do Estado de São Paulo - SABESP. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 15% of Companhia de Saneamento Básico do Estado de São Paulo - SABESP stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Companhia de Saneamento Básico do Estado de São Paulo - SABESP better, we need to consider many other factors. Take risks for example - Companhia de Saneamento Básico do Estado de São Paulo - SABESP has 2 warning signs (and 1 which is concerning) we think you should know about.

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.