Institutional investors now hold a commanding 69% stake in SNC-Lavalin Group Inc., a factor that significantly impacts the company's stock price, as revealed today. This substantial ownership comes at a time when the engineering and construction firm has seen its market capitalization rise to CA$ 6.9 billion, delivering a robust one-year return of 68% to its shareholders.
At the helm of this ownership is Caisse de dépôt et placement du Québec, which is the largest shareholder with a 20% interest in the company. Following closely are the second and third largest shareholders, wielding about 12% and 11% of the shares, respectively. This level of concentrated ownership underscores the influence institutional investors can exert on the company. It also highlights potential risks, such as volatility in share price that could arise if these major shareholders were to sell their stakes at once.
Despite the overwhelming presence of institutional investors, insiders including board members and high-ranking managers own less than 1% of SNC-Lavalin, equivalent to CA$14 million in shares. Nevertheless, recent buying activity by insiders suggests confidence in the company's future prospects. Prospective investors are advised to remain vigilant for any insider selling which could signal shifts in executive sentiment.
The general public holds a significant, albeit smaller, share of 30%, which affords them a degree of influence over company governance. Notably absent from the shareholder mix are hedge funds, which currently do not have a substantial investment in SNC-Lavalin.
When considering an investment in SNC-Lavalin Group Inc., individuals should look beyond ownership structure and evaluate additional factors such as analyst forecasts, potential warning signs, and the company's performance relative to local market indices. The firm's standing within the investment community and its representation in major indices are also important considerations for evaluating its stock. Furthermore, predictions regarding future performance play a critical role in assessing whether SNC-Lavalin represents a sound investment opportunity.
InvestingPro Insights
In light of the real-time data from InvestingPro, SNC-Lavalin Group Inc. has a market capitalization of 5141.87M USD and a P/E ratio of 93.76, indicating a high earnings multiple. This suggests that investors are expecting high growth rates in the future. Over the last twelve months as of Q2 2023, the company has seen a revenue growth of 5.73%, which aligns with the first InvestingPro Tip that the company's revenue growth has been accelerating.
Moreover, the company has been profitable over the last twelve months, which is supported by the InvestingPro Tip that net income is expected to grow this year. However, four analysts have revised their earnings downwards for the upcoming period, which could be a potential warning sign for investors.
Lastly, despite poor earnings and cash flow that may force dividend cuts, as indicated by the second InvestingPro Tip, the company has maintained dividend payments for 38 consecutive years. This demonstrates the company's commitment to return capital to its shareholders.
In addition to these insights, InvestingPro offers numerous other tips and data points to help investors make informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.