In the wake of Yduqs Participações S.A.’s (BVMF:YDUQ3) latest R$235m market cap drop, institutional owners may be forced to take severe actions

Important Findings

  • Significantly high institutional ownership implies that Yduqs Participações stock price is sensitive to its trading activities
  • The top 7 shareholders own 50% of the company
  • Insiders own 12% of Yduq’s participações

A look at the shareholders of Yduqs Participações SA (BVMF:YDUQ3) can tell us which group is the strongest. The group with the most shares in the company, around 62%, are institutions. In other words, the group is exposed to maximum upside (or downside risk).

As a result, institutional investors suffered the heaviest losses last week after the market cap fell by R$235 million. This group of investors may be particularly concerned about the current loss, which adds to a 63% 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 the decline continues, institutional investors could be pressured to sell Yduqs Participações, which could hurt individual investors.

Let’s delve deeper into each type of owners of Yduqs Participações, starting with the table below.

Check out our latest analysis for Yduqs Participações

BOVESPA:YDUQ3 property breakdown March 6, 2023

What does institutional ownership tell us about Yduq’s participações?

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.

Yduqs Participações already has institutions in the share register. In fact, they own a respectable stake in the company. This may indicate that the company has a certain level of credibility in the investor community. However, it’s best not to rely on the supposed confirmation that comes from institutional investors. They too are sometimes wrong. If several institutes change their opinion on a stock at the same time, the share price could fall quickly. It is therefore worthwhile to take a look at Yduqs Participações winnings history below. Of course, what really matters is the future.

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BOVESPA:YDUQ3 Earnings and Sales Growth March 6, 2023

Investors should note that institutions actually own more than half of the company, so collectively they can wield significant power. Yduqs Participações is not owned by hedge funds. Chaim Zaher is currently the largest shareholder with 12% of the outstanding shares. With 11% and 6.0% of the outstanding shares, respectively, BRL Trust Investimentos Ltda. and Wellington Management Group LLP are the second and third largest shareholders.

We have also observed that the top 7 shareholders make up more than half of the share register, with some smaller shareholders balancing the interests of the larger ones to some extent.

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. There are a fair number of analysts covering the stock, so it might be helpful to get their overall view on the future.

Insider ownership of Yduqs Participações

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.

Our latest data shows that insiders own a reasonable stake in Yduqs Participações SA. Insiders have a BRL222 million stake in this BRL1.9 billion deal. It’s great to see insiders so invested in the business. It might be worth checking if these insiders have bought recently.

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General Public Property

The general public, who are usually private investors, hold a 15% stake in Yduqs Participações. While this ownership may not be sufficient to sway a policy decision in their favor, they can still collectively influence company policy.

Private Equity Ownership

With a stake of 11%, private equity houses are able to help shape the corporate strategy with a focus on value creation. This might encourage some investors, as private equity is sometimes able to promote strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after listing it publicly.

Next Steps:

I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. Note that Yduq’s Participações is shown 2 warning signs in our investment analysis and 1 of them should not be ignored…

If you’d rather learn what analysts are predicting for future growth, don’t miss this one free Analyst forecast report.

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.

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.


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