Positive week for MRV Engenharia e Participações S.A. (BVMF:MRVE3) institutional investors who lost 9.1% over the past year

If you want to know who really controls MRV Engenharia e Participações S.A. (BVMF:MRVE3), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 42% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

After a year of 9.1% losses, last week’s 13% gain would be welcomed by institutional investors as a likely sign that returns might start trending higher.

Let’s delve deeper into each type of owner of MRV Engenharia e Participações, beginning with the chart below.

If you’re not interested in researching MRVE3’s ownership structure, we have a free list of interesting investing ideas to potentially inspire your next investment!

What Does The Institutional Ownership Tell Us About MRV Engenharia e Participações?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that MRV Engenharia e Participações does have institutional investors; and they hold a good portion of the company’s stock. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see MRV Engenharia e Participações’ historic earnings and revenue below, but keep in mind there’s always more to the story.

MRV Engenharia e Participações is not owned by hedge funds. From our data, we infer that the largest shareholder is Rubens Menin de Souza (who also holds the title of Top Key Executive) with 38% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 9.7% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.

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 MRV Engenharia e Participações

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. 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.

It seems insiders own a significant proportion of MRV Engenharia e Participações S.A.. It has a market capitalization of just R$6.0b, and insiders have R$2.2b worth of shares in their own names. That’s quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MRV Engenharia e Participações. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we’ve spotted with MRV Engenharia e Participações (including 1 which doesn’t sit too well with us) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.