Institutions own 31% of Marfrig Global Foods S.A. (BVMF:MBRF3) shares but private companies control 36% of the company

Key Insights

• Significant control over Marfrig Global Foods by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 53% of the company
• Institutional ownership in Marfrig Global Foods is 31%

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Every investor in Marfrig Global Foods S.A. (BVMF:MBRF3) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 36% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, institutions make up 31% of the company’s shareholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's delve deeper into each type of owner of Marfrig Global Foods, beginning with the chart below.

Check out our latest analysis for Marfrig Global Foods

What Does The Institutional Ownership Tell Us About Marfrig Global Foods?

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 Marfrig Global Foods does have institutional investors; and they hold a good portion of the company's stock. 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 Marfrig Global Foods' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Marfrig Global Foods. Looking at our data, we can see that the largest shareholder is MMS Participações S.A. with 36% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Marfrig Global Foods

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

Our most recent data indicates that insiders own some shares in Marfrig Global Foods S.A.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around R$2.6b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 36%, of the company's shares. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Marfrig Global Foods better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Marfrig Global Foods (including 4 which don't sit too well with us) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.