To get an idea of who really controls Mills Estruturas e Serviços de Engenharia SA (BVMF:MILS3), it is important to understand the ownership structure of the company. We can see that individual investors hold the lion’s share of the company with 32% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Clearly, individual investors benefited the most after the company’s market capitalization rose by 166 million reais last week.
In the table below we zoom in on the different ownership groups of Mills Estruturas e Serviços de Engenharia.
Check out our latest review for Mills Estruturas e Serviços de Engenharia
What does institutional ownership tell us about Mills Estruturas e Serviços de Engenharia?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors hold a significant share of Mills Estruturas e Serviços de Engenharia. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Mills Estruturas e Serviços de Engenharia’s historical revenue and earnings below, but keep in mind there’s always more to the story.
Hedge funds do not have many shares in Mills Estruturas e Serviços de Engenharia. Southern Cross Group is currently the largest shareholder, with 21% of the outstanding shares. Snow Petrel SL is the second largest shareholder with 9.7% of the ordinary shares, and Sullair Argentina, SA owns approximately 9.0% of the company’s shares.
Upon closer inspection, we found that more than half of the company’s shares are held by the top 6 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by those of the smaller ones.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Property of Estruturas e Serviços de Engenharia Mills Insiders
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that insiders hold a significant stake in Mills Estruturas e Serviços de Engenharia SA. Insiders have a stake of R$222 million in this R$1.5 billion venture. We would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have been buying or selling.
General public property
The general public, who are usually individual investors, hold a 32% stake in Mills Estruturas e Serviços de Engenharia. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private equity ownership
With a 21% stake, private equity firms are able to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.
Private Company Ownership
We can see that private companies hold 19% of the issued shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
While it is worth considering the different groups that own a business, there are other, even more important factors. Example: we have identified 1 warning sign for Mills Estruturas e Serviços de Engenharia you should be aware.
Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.