Every investor in Science Applications International Corporation (NYSE: SAIC) needs to know about the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Companies that were previously state-owned tend to have fewer insiders.
Science Applications International is a fairly large company. It has a market capitalization of 4.9 billion US dollars. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about Science Applications International.
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What does institutional ownership tell us about Science Applications International?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
As you can see, institutional investors have a significant stake in Science Applications International. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Science Applications International’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. We note that hedge funds do not have a significant investment in Science Applications International. Our data shows that Wellington Management Group LLP is the largest shareholder with 11% of the shares outstanding. In comparison, the second and third shareholders hold around 8.9% and 8.8% of the capital.
A closer look at our ownership figures suggests that the top 14 shareholders have a combined 50% ownership, implying that no shareholder has a majority.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider property of Science Applications International
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
Our data suggests that insiders own less than 1% of Science Applications International Corporation in their own name. It is a fairly large company, so it would be possible for the board members to have a significant interest in the company, without owning a large part of a proportional interest. In this case, they own around $ 30 million in stock (at current prices). It’s good to see board members owning stocks, but it might be worth checking out if those insiders have bought.
General public property
The general public has a 20% stake in Science Applications International. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Consider, for example, the ever-present specter of investment risk. We have identified 2 warning signs with Science Applications International, and understanding them should be part of your investment process.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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