Northrop Grumman (NYSE: NOC) is a global defense company that designs and manufactures advanced aircraft, space systems and missile defense technologies for the U.S. military and its allies. The company’s stock recently traded at about $590 per share, with a market capitalization of about $84.5 billion.
Once best known for its aircraft programs, Northrop has expanded into next-generation space systems and defense platforms, becoming a key player in the national security sector. Fueled by steady government spending and long-term contracts, the company has become a reliable company for institutional investors seeking stability in uncertain markets.
Its work on programs such as the B-21 stealth bomber and missile warning satellites provides a competitive advantage that cannot be easily replicated. While insiders and executives have historically held large shares, today most of Northrop’s stock is held by large asset managers, pension systems, and hedge funds.
By understanding the actions of NOC’s owners and insiders, we can take a look at what the big players are really saying about the stock right now.
Who is the majority shareholder of Northrop Grumman?
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Northrop Grumman produces advanced aircraft, space systems, and missile defense technologies and is one of the world’s largest defense contractors. Northrop Grumman’s shareholders are dominated by major asset managers, with a handful of active funds making strong moves.
- State Street Global Advisors: 13.4 million shares (9.38%), ~$7.9 billion. Decreased holdings by 25.9K shares (-0.2%).
- Pioneer Group 13.4 million shares (9.33%), ~$7.9 billion. 154K shares (+1.2%) added.
- Capital International Investors: 12.0 million shares (8.36%), ~$7.1 billion. Added 3.1 million shares (+35%).
- BlackRock: 7.2 million shares (5.0%), ~$4.2 billion. Decrease in holdings of 451K shares (-5.9%).
- Wellington Management 5.5 million shares (3.8%), ~$3.2 billion. 365K added (+7.1%).
- Geode Capital: 3.1 million shares (2.2%), ~$1.8 billion. Slight increase (+0.5%).
- Morgan Stanley: 2.9 million shares (2.0%), ~$1.7 billion. Added 78K shares (+2.8%).
- Capital World Investors: 2.6 million shares (1.8%), ~$1.5 billion. 658K added (+34%).
- T.Rowe Price: 2.5 million shares (1.7%), ~$1.5 billion. 448K added (+22%).
- JPMorgan Asset Management: 2.0 million shares (1.4%), ~$1.2 billion. Decrease of 103,000 shares (-4.9%).
- Sanders Capital: 2 million shares (1.4%), ~$1.2 billion. Reduced holding of 38,000 shares (-1.9%).
Adage Capital Partners, led by Robert Atchinson and Phillip Gross, was one of the standout firms last quarter as it increased its stake in Northrop by 322 percent to approximately 111,000 shares valued at $55 million. This aggressive increase seems a strong testament to confidence in the stock.
Another big move was Squarepoint Ops LLC, which increased its position 128 percent to nearly 18,000 shares worth $9 million. For a systematic trading firm, this jump could mean a stronger tactical bet on defense risk.
Meanwhile, Gamco Investments, managed by Mario Gabelli, increased its stake by nearly 100 percent to over 3,000 shares valued at $1.6 million. Although small, the significant increase could signal selective optimism on the part of the value-oriented manager.
The large jumps in Capital International and Capital World may indicate greater confidence in Northrop’s role in future defense spending. BlackRock’s decline suggests that some managers are more cautious.
For investors, the mixed trend suggests that optimism exists, but it is not widespread.
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Recent insider buys for Northrop Grumman Corporation.
Insider trading at Northrop Grumman has been very active in recent months, giving investors a window into how the company’s executives manage personal risk. Most of the trading has involved stock sales by executives, with only a few small purchases by directors.
Here are some recent inside sales:
- Thomas H. Jones (officer): sold ~729 shares for $525 in July.
- Mark A. Welsh III (Director): sold a modest 1-21 shares at $503-509 in July.
- Kathy J. Wharton (CEO): sold about 7,500 shares at $506 in June, plus about 3,750 more at $495.
- Robert J. Fleming (officer): sold ~3,500 shares for $506 in June.
- Marianne Catherine Brown (Director): purchased ~93 shares for $500 in June.
- Arvind Krishna (Director): purchased ~73 shares at $500 in June.
Much of the activity seems to favor selling, particularly by CEOs and senior managers. These sales may reflect diversification or personal planning, but could also be interpreted as a signal of caution as the stock price approaches recent highs.
The amount of purchases made by small administrators is not large, but at least it shows that they have some willingness to hold risk exposures.
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What does the data tell us about ownership and insider trading?
Northrop’s shareholders are mainly State Street and Vanguard, which link the stock to global index flows. Active fund managers such as Capital International and Capital World have significantly increased their holdings in the stock, which may reflect greater confidence in the benefits of defense spending. On the other hand, BlackRock and JP Morgan have reduced their positions, suggesting that not all institutions share the same optimism.
Insider activity, led by CEOs and other executives, seems to favor selling, with token purchases by directors. The absence of more substantial insider purchases may indicate that leadership is not eager to increase its holdings at current valuation levels.
The signals are mixed. Institutional views are mixed but tend to be constructive, while insiders are more cautious. This combination suggests that Northrop is seen as a long-term stable defense company, although expectations may be more cautious at current levels.
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