LATAM Airlines Group S.A.'s (SNSE:LTM) largest shareholders are private companies with 38% ownership, institutions own 20%

Key Insights

• The considerable ownership by private companies in LATAM Airlines Group indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 58% of the company
• Institutions own 20% of LATAM Airlines Group

A look at the shareholders of LATAM Airlines Group S.A. (SNSE:LTM) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutions on the other hand have a 20% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

Let's delve deeper into each type of owner of LATAM Airlines Group, beginning with the chart below.

Check out our latest analysis for LATAM Airlines Group

What Does The Institutional Ownership Tell Us About LATAM Airlines Group?

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.

As you can see, institutional investors have a fair amount of stake in LATAM Airlines Group. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see LATAM Airlines Group's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 14% of LATAM Airlines Group shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is Lauca Investments, Llc with 24% of shares outstanding. Strategic Value Partners, LLC is the second largest shareholder owning 14% of common stock, and Delta Air Lines, Inc. holds about 10% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of LATAM Airlines Group

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LATAM Airlines Group. 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.

Private Company Ownership

We can see that Private Companies own 38%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 10% of LATAM Airlines Group stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand LATAM Airlines Group better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for LATAM Airlines Group you should be aware of, and 1 of them can't be ignored.

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.