SNC-Lavalin Group Inc 2

I own this stock of SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF). I first bought this stock in 1989. I sold some of this stock in 2008 as it had grown so much that I felt that I had too much of my portfolio in this one stock. I bought a bit of this stock in 2012 for my Trading Account.

When I look at insider trading, I find a bit of insider selling and a bit of insider buying. The insiders not only have options, but Deferred Share Unit, Restricted Share Units and Performance Share Units.

The CEO has shares worth $1.1M and has options are worth $1.7M. The CFO has shares worth $12M and has options worth $11.7M. An officer has some shares and has options worth $0.2M. Another officer has shares worth $4.9M and has options worth $10.3M. A lot of officers of this company have options. A director has shares worth $0.8M and has options worth $0.7M. This is just to give you an idea on insider share ownership and option values.

The 5 year low, median and high median Price/Earnings Ratios are 14.63, 20.50 and 24.93. The current P/E Ratio is 17.6 based on a stock price of $41.85 and 2013 earnings estimate of $2.33. This test shows that the stock price is reasonable and below the median price.

I get a Graham Price of $27.06. The 10 year low, median and high median Price/Graham Price Ratios are 1.56, 1.96 and 2.38. The current P/GP Ratio is 1.55 and this shows that the stock price is rather cheap.

I get a 10 year median Price/Book Value per Share Ratio of 5.06 and a current P/B Ratio of 2.99. The current ratio is only 59% of the 10 year Ratio and this shows that the current stock price is quite cheap.

The current dividend yield is 2.20% and the 5 year median dividend yield is 1.48%. The current yield is some 48% higher than the 5 year median dividend yield. This is the most concrete evidence that the stock's price is cheap.

When I look at analysts' recommendations I find Strong Buy, Buy and Hold recommendations. The consensus recommendations would be a buy. The 12 month consensus stock price is $49.10. This implies a total return of 19.54%, with 2.2% from dividends and 17.34% from capital gains.

Stocks are often cheap for a reason and there are lots of reasons for this stock to be cheap. Read a bit about the corruption scandal that has severely damaged this company atReuters. This company still has a long way to go to recover. See my spreadsheet at snc.htm.

SNC-Lavalin are involved with engineering and construction work around the world, this includes infrastructure and Buildings; infrastructure and construction; power (nuclear, thermal, hydro etc.); chemicals and petroleum; environmental projects; mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is here SNC-Lavalin.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.