What type of shareholders does Science Applications International Corporation (NYSE: SAIC) have?

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A look at the shareholders of Science Applications International Corporation (NYSE: SAIC) can tell us which group is more powerful. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. Companies that have been privatized tend to have low insider ownership.

Science Applications International has a market cap of US$5.3 billion, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. Looking at our ownership group data (below), it appears that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about Science Applications International.

Check out our latest analysis for Science Applications International

NYSE: Distribution of SAIC ownership on August 16, 2022

What does institutional ownership tell us about Science Applications International?

Many institutions measure their performance against an index that approximates the local market. They therefore generally pay more attention to companies that are included in the main indices.

We can see that Science Applications International has institutional investors; and they own a good part of the shares of the company. 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 Science Applications International’s revenue and historical earnings below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
NYSE: SAIC Earnings and Revenue Growth August 16, 2022

Institutional investors own more than 50% of the company, so together they can probably heavily influence board decisions. Science Applications International is not owned by hedge funds. Wellington Management Group LLP is currently the company’s largest shareholder with 10% of the shares outstanding. With 9.2% and 8.7% of the shares outstanding, respectively, The Vanguard Group, Inc. and BlackRock, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 12 shareholders hold a combined ownership of 51%, implying that no single shareholder has a majority.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider property of Science Applications International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that Science Applications International Corporation insiders own less than 1% of the company. This is a fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much proportional interest. In this case, they own about $32 million worth of stock (at today’s prices). It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.

General public property

The general public, including retail investors, owns 22% of the company’s capital and therefore cannot be easily ignored. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Science Applications International, we need to consider many other factors. Know that Science Applications International shows 3 warning signs in our investment analysis and 1 of them is a little worrying…

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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.

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