Patria Latin American Opportunity Acquisition Corp. (NASDAQ:PLAO) is largely controlled by institutional shareholders who own 72% of the company
Key Insights
Given the large stake in the stock by institutions, Patria Latin American Opportunity Acquisition's stock price might be vulnerable to their trading decisions
The top 10 shareholders own 51% of the company
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Patria Latin American Opportunity Acquisition Corp. (NASDAQ:PLAO), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 72% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Patria Latin American Opportunity Acquisition.
See our latest analysis for Patria Latin American Opportunity Acquisition
What Does The Institutional Ownership Tell Us About Patria Latin American Opportunity Acquisition?
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.
Patria Latin American Opportunity Acquisition 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. 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 Patria Latin American Opportunity Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 12% of Patria Latin American Opportunity Acquisition shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is Patria Investments Limited, with ownership of 20%. Saba Capital Management, L.P. is the second largest shareholder owning 5.6% of common stock, and Glazer Capital, LLC holds about 4.3% of the company stock.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Patria Latin American Opportunity Acquisition
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.
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.
Our most recent data indicates that insiders own less than 1% of Patria Latin American Opportunity Acquisition Corp.. It has a market capitalization of just US$309m, and the board has only US$967k worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 16% stake in Patria Latin American Opportunity Acquisition. 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 Patria Latin American Opportunity Acquisition better, we need to consider many other factors. For instance, we've identified 4 warning signs for Patria Latin American Opportunity Acquisition (2 are a bit unpleasant) that you should be aware of.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
