Socovesa S.A. (SNSE:SOCOVESA) surges 15%; private companies who own 50% shares profited along with institutions

By
Simply Wall St
Published
May 18, 2022
SNSE:SOCOVESA
Source: Shutterstock

A look at the shareholders of Socovesa S.A. (SNSE:SOCOVESA) can tell us which group is most powerful. With 50% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 15% increase in the stock price last week, private companies profited the most, but institutions who own 21% stock also stood to gain from the increase.

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

View our latest analysis for Socovesa

ownership-breakdown
SNSE:SOCOVESA Ownership Breakdown May 18th 2022

What Does The Institutional Ownership Tell Us About Socovesa?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Socovesa. 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 Socovesa, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SNSE:SOCOVESA Earnings and Revenue Growth May 18th 2022

We note that hedge funds don't have a meaningful investment in Socovesa. Looking at our data, we can see that the largest shareholder is Inversiones San Miguel Dos Ltda. with 24% of shares outstanding. Justino Negrón Bornand is the second largest shareholder owning 13% of common stock, and Moneda S.A. Administradora General de Fondos holds about 9.2% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Socovesa

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Socovesa S.A.. Insiders have a CL$17b stake in this CL$130b business. 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

The general public, who are usually individual investors, hold a 16% stake in Socovesa. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 50%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Socovesa better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Socovesa (including 2 which shouldn't be ignored) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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