Positive week for Companhia Brasileira De Distribuicao (BVMF:PCAR3) institutional investors who lost 3.4% over the past year

Key Insights

• Significantly high institutional ownership implies Companhia Brasileira De Distribuicao's stock price is sensitive to their trading actions
• A total of 11 investors have a majority stake in the company with 52% ownership
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Companhia Brasileira De Distribuicao (BVMF:PCAR3) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's R$152m market cap gain would probably be appreciated by institutional investors, especially after a year of 3.4% losses.

Let's delve deeper into each type of owner of Companhia Brasileira De Distribuicao, beginning with the chart below.

View our latest analysis for Companhia Brasileira De Distribuicao

What Does The Institutional Ownership Tell Us About Companhia Brasileira De Distribuicao?

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.

Companhia Brasileira De Distribuicao already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Companhia Brasileira De Distribuicao, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 9.9% of Companhia Brasileira De Distribuicao shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. SPX Gestão de Recursos Ltda is currently the company's largest shareholder with 9.9% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.6% and 6.1% of the stock.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Companhia Brasileira De Distribuicao

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 can report that insiders do own shares in Companhia Brasileira De Distribuicao. As individuals, the insiders collectively own R$77m worth of the R$1.4b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Companhia Brasileira De Distribuicao. 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 3.2%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Companhia Brasileira De Distribuicao 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.