With 82% ownership of the shares, L3Harris Technologies, Inc. (NYSE:LHX) is heavily dominated by institutional owners

editorial-team@simplywallst.com (Simply Wall St)

Sat, Nov 25, 2023, 6:00 AM 4 min read

Given the large stake in the stock by institutions, L3Harris Technologies' stock price might be vulnerable to their trading decisions
A total of 15 investors have a majority stake in the company with 50% ownership
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of L3Harris Technologies, Inc. (NYSE:LHX) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 82% 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 L3Harris Technologies.

See our latest analysis for L3Harris Technologies

ownership-breakdown — NYSE:LHX Ownership Breakdown November 25th 2023

What Does The Institutional Ownership Tell Us About L3Harris Technologies?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that L3Harris Technologies does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at L3Harris Technologies' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NYSE:LHX Earnings and Revenue Growth November 25th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in L3Harris Technologies. BlackRock, Inc. is currently the company's largest shareholder with 9.5% of shares outstanding. With 9.2% and 8.4% of the shares outstanding respectively, The Vanguard Group, Inc. and Capital Research and Management Company are the second and third largest shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of L3Harris Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of L3Harris Technologies, Inc. in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$171m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand L3Harris Technologies better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for L3Harris Technologies you should be aware of, and 1 of them is significant.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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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.