In the wake of Vibra Energia S.A.’s (BVMF:VBBR3) latest R$736m market cap drop, institutional owners may be forced to take severe actions

Important Findings

• The institutions’ sizable holdings in Vibra Energia imply that they have a significant impact on the company’s share price
• 51% of the company is held by the top 15 shareholders
• Data from analyst forecasts and ownership research can be used to better assess a company’s future performance

If you want to know who really controls Vibra Energia SA (BVMF:VBBR3), you need to look at the composition of the share register. With 61%, institutions own the maximum shares in the company. In other words, the group is exposed to maximum upside (or downside risk).

And institutional investors suffered the heaviest losses after the company’s share price fell 4.4% last week. This group of investors may be particularly concerned about the current loss, which adds to a 34% year-on-year loss for shareholders. Institutions, also known as “smart money,” have a huge impact on how a stock’s price moves. Therefore, if Vibra Energia’s stock price remains weak, institutional investors may feel compelled to sell the stock, which may not be ideal for retail investors.

Let’s take a closer look at what the different types of shareholders can tell us about Vibra Energia.

Check out our latest analysis for Vibra Energia

What does institutional ownership tell us about Vibra Energia?

Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies that are included in major indices.

Vibra Energia already has institutions in the share register. In fact, they own a respectable stake in the company. This suggests some credibility among professional investors. But we can’t rely on that alone, as institutions sometimes make bad investments, just like everyone else. It’s not uncommon for the stock price to fall sharply when two large institutional investors attempt to sell a stock at the same time. So it’s worth reviewing Vibra Energia’s earnings history (below). Of course, keep in mind that there are other factors to consider as well.

Institutional investors own over 50% of the company, so collectively they can likely heavily influence board decisions. We find that hedge funds have no meaningful investment in Vibra Energia. Intrag DTMM Ltd is currently the largest shareholder with 16% of the outstanding shares. In comparison, the second- and third-largest shareholders hold around 6.8% and 5.2% of the shares, respectively.

If we look at the register of shareholders, we can see that 51% of ownership is controlled by the 15 largest shareholders, meaning that no single shareholder has a controlling interest in the property.

While examining a company’s institutional ownership can add value to your research, it’s also a good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. Quite a few analysts cover the stock, so you can easily look at the projected growth.

Insider ownership of Vibra Energia

The definition of corporate insider can be subjective and varies by jurisdiction. Our data reflects individual insiders and captures at least board members. Management runs the business, but the CEO is accountable to the board even if he or she is a member.

Insider ownership is positive when it signals leadership thinks like the true owners of the company. However, a high proportion of insiders can give immense power to even a small group within the organization. This can sometimes be negative.

We note that our data does not show any directors who personally hold stock. It is unusual not to have at least some personal holdings of board members, so our data may be inaccurate. A good next step would be to look at how much the CEO is paying.

General Public Property

The general public — including retail investors — own 34% of shares in the company, so it can’t be easily ignored. While this ownership may not be sufficient to sway a policy decision in their favor, they can still collectively influence company policy.

Next Steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important. For example risks. Every company has them and we discovered them 3 Warning Signs of Vibra Energia (1 of which should not be ignored!) that you should know.

Ultimately the future is the most important thing. You can access it free Report on analysts’ forecasts for the company.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.