Individual investors own 30% of Banco do Brasil S.A. (BVMF:BBAS3) shares but state or government control 50% of the company
Key Insights
- Banco do Brasil's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
- 50% of the company is held by a single shareholder (Brazil)
- Institutional ownership in Banco do Brasil is 20%
A look at the shareholders of Banco do Brasil S.A. (BVMF:BBAS3) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual investors make up 30% of the company’s shareholders.
Let's delve deeper into each type of owner of Banco do Brasil, beginning with the chart below.
See our latest analysis for Banco do Brasil
What Does The Institutional Ownership Tell Us About Banco do Brasil?
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 Banco do Brasil 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Banco do Brasil, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Banco do Brasil. Our data shows that Brazil is the largest shareholder with 50% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 4.5% and 2.1%, of the shares outstanding, respectively.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Banco do Brasil
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.
General Public Ownership
With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Banco do Brasil. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Banco do Brasil better, we need to consider many other factors. For instance, we've identified 2 warning signs for Banco do Brasil that you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.