Institutional owners may take dramatic actions as Controladora Vuela Compañía de Aviación, S.A.B. de C.V.'s (BMV:VOLARA) recent 5.7% drop adds to one-year losses

Key Insights

• Significantly high institutional ownership implies Controladora Vuela Compañía de Aviación. de's stock price is sensitive to their trading actions
• 50% of the business is held by the top 16 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (BMV:VOLARA) can tell us which group is most powerful. With 42% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors endured the highest losses last week after market cap fell by Mex$1.1b. The recent loss, which adds to a one-year loss of 0.9% for stockholders, may not sit well with this group of investors. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. Hence, if weakness in Controladora Vuela Compañía de Aviación. de's share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

In the chart below, we zoom in on the different ownership groups of Controladora Vuela Compañía de Aviación. de.

Check out our latest analysis for Controladora Vuela Compañía de Aviación. de

What Does The Institutional Ownership Tell Us About Controladora Vuela Compañía de Aviación. de?

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 Controladora Vuela Compañía de Aviación. de. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Controladora Vuela Compañía de Aviación. de's earnings history below. Of course, the future is what really matters.

Controladora Vuela Compañía de Aviación. de is not owned by hedge funds. Indigo Partners LLC is currently the largest shareholder, with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.7% and 4.4% of the stock. Additionally, the company's CEO Enrique Beltranena Mejicano directly holds 0.9% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Controladora Vuela Compañía de Aviación. de

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 can report that insiders do own shares in Controladora Vuela Compañía de Aviación, S.A.B. de C.V.. As individuals, the insiders collectively own Mex$499m worth of the Mex$19b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Controladora Vuela Compañía de Aviación. de. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 18%, private equity firms could influence the Controladora Vuela Compañía de Aviación. de board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Controladora Vuela Compañía de Aviación. de (including 1 which 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.