A look at the shareholders of BAE Systems plc (LON:BA.) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 82% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And things are looking up for institutional investors after the company gained UK£1.7b in market cap last week. The one-year return on investment is currently 40% and last week's gain would have been more than welcomed.
In the chart below, we zoom in on the different ownership groups of BAE Systems.
What Does The Institutional Ownership Tell Us About BAE Systems?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
BAE Systems already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 BAE Systems' earnings history below. Of course, the future is what really matters.
LSE:BA. Earnings and Revenue Growth June 1st 2025
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 BAE Systems. Looking at our data, we can see that the largest shareholder is Capital Research and Management Company with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.9% and 5.1% of the stock.
After doing some more digging, we found that the top 13 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of BAE Systems
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of BAE Systems plc in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own UK£51m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 13% stake in BAE Systems. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for BAE Systems you should know about.
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.
