Every investor in TC Traders Club S.A. (BVMF:TRAD3) should be aware of the most powerful shareholder groups. With 44% stake, individual insiders 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, insiders were the biggest beneficiaries of last week’s 19% gain.
Let’s take a closer look to see what the different types of shareholders can tell us about TC Traders Club.
What Does The Institutional Ownership Tell Us About TC Traders Club?
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.
TC Traders Club already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 TC Traders Club’s earnings history below. Of course, the future is what really matters.
Hedge funds don’t have many shares in TC Traders Club. Pedro Bernardo de Albuquerque Filho is currently the largest shareholder, with 27% of shares outstanding. StartupsBR is the second largest shareholder owning 27% of common stock, and Omar Zanatto Miranda holds about 6.6% of the company stock.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of TC Traders Club
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of TC Traders Club S.A.. It has a market capitalization of just R$1.9b, and insiders have R$828m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public– including retail investors — own 22% 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 Equity Ownership
With an ownership of 27%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.