Institutional investors are Inversiones La Construcción S.A.'s (SNSE:ILC) biggest bettors and were rewarded after last week's CL$51b market cap gain

Key Insights

• Given the large stake in the stock by institutions, Inversiones La Construcción's stock price might be vulnerable to their trading decisions
• 67% of the company is held by a single shareholder (Cámara Chilena de la Construcción)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Inversiones La Construcción S.A. (SNSE:ILC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 74% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 3.2% last week. The one-year return on investment is currently 136% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Inversiones La Construcción, beginning with the chart below.

See our latest analysis for Inversiones La Construcción

What Does The Institutional Ownership Tell Us About Inversiones La Construcción?

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 Inversiones La Construcción does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Inversiones La Construcción, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Inversiones La Construcción is not owned by hedge funds. Cámara Chilena de la Construcción is currently the largest shareholder, with 67% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 1.4% and 1.3% of the shares outstanding respectively, Moneda Administradora de Fondos de Inversion SA and The Vanguard Group, Inc. are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Inversiones La Construcción

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our data cannot confirm that board members are 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

The general public, who are usually individual investors, hold a 26% stake in Inversiones La Construcción. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Inversiones La Construcción better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Inversiones La Construcción (including 1 which shouldn't be ignored) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.