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 around $590 per share and has a market capitalization of around $84.5 billion.
Once best known for its aircraft programs, Northrop has branched out into space systems and state-of-the-art defense platforms, making it an important player in the area of national security. Steady government spending and long-term contracts have made Northrop a reliable name for institutional investors seeking stability in an uncertain market.
Northrop’s work on programs such as the B-21 stealth bomber and missile warning satellites gives it a competitive advantage that cannot be easily replicated. While historically insiders and management have had a large stake, Northrop’s shares are now mainly held by large asset managers, pension plans and hedge funds.
By understanding the behavior of NOC owners and insiders, we can see what the big players are really saying about the stock at the moment.
Who are Northrop Grumman’s main shareholders?
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Northrop Grumman is one of the world’s most important defense contractors, producing advanced aircraft, space systems and missile defense technologies. Northrop Grumman’s shareholders are dominated by major asset managers, with a small number of active funds making strong moves.
- State Street Global Advisors: 13.4 million shares (9.38%), around $7.9 billion. Fall of 25.9 million shares (-0.2%).
- Pioneer Group 13.4 million shares (9.33%), valued at US$7.9 billion. Added 154,000 shares (+1.2%).
- Capital International Investors: 12 million shares (8.36%), valued at US$7.1 billion. Added 3.1 million shares (+35%).
- BlackRock: 7.2 million shares (5.0%), valued at approximately US$4.2 billion. Decrease in holdings of 451,000 shares (-5.9%).
- Wellington Management holds 5.50 million shares or 3.8% of its portfolio with a value of US$3.32 billion. An increase of 3.65 million shares (+7.1%).
- Geode Capital: 3.1 million shares (2.2 percent), valued at US$1.8 billion. Slight increase (+0.5 percent).
- Morgan Stanley: 2.9 million shares (2.0%), around $1.7 billion. Citigroup: 7.78 million shares (+2.8%).
- Capital World Investors: 2.6 million shares (1.8%), valued at US$1.5 billion. Added 658,000 (+34%).
- T.Rowe price: 2.5 million shares (1.7%), around US$1.5 billion. Added 448,000 shares (+22%).
- JPMorgan Asset Management: 2 million shares, or 1.4%, for around $1.2 billion. Reduction of 103,000 shares, or -4.9%.
- Sanders Capital: 2 million shares (1.4%), valued at around $1.2 billion. Reduction of 38,000 shares (-1.9%).
Addison Capital Partners, led by Robert Atchinson and Philip Gross, was one of the notable participants, increasing its stake in Northrop by 322% in the last quarter, buying around 111,000 shares, worth $55 million. This aggressive increase in shareholding is seen as a strong indication of confidence in the stock.
Another big move was Squarepoint Ops LLC, which increased its position by 128% to almost 18,000 shares, worth $9 million . For systematic trading firms, this increase could mean the intensification of tactical bets on defensive risks.
Meanwhile, Mario Gabelli’s Gamco Investments increased its stake by almost 100%, buying more than 3,000 shares worth $1.6 million. Although small, this large increase could be a sign of selective optimism on the part of the value-oriented manager.
The large gains by 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 adopting a more cautious stance.
For investors, the mixed trends suggest that optimism exists, but is not widespread.
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Recent insider trading at Northrop Grumman Corporation
Insider trading at Northrop Grumman has been very active in recent months, giving investors an insight into how the company’s executives manage their personal risks. Most of the transactions have involved the sale of shares by executives, with only a few small purchases by directors.
Here’s a recent example of internal sales
- Thomas H. Jones (director): Sold approximately 729 shares in July at a price of $525.
- Mark A. Welsh III (Director): Sold 1 to 21 shares in July for $503 to $509.
- Kathy J. Wharton (CEO): In June, we sold about 7,500 shares at $506 and another 3,750 shares at $495.
- Robert J. Fleming (director): Sold approximately 3,500 shares in June for $506.
- Marianne Catherine Brown (Director): I bought approximately 93 shares in June for $500.
- Arvind Krishna (Director): I bought about 73 shares in June for $500.
Most of the activity seems to favor selling, especially on the part of CEOs and senior managers, which could reflect business diversification or personal planning, but could also be interpreted as a sign of caution as share prices approach recent highs.
Although the purchase values of the small directors are not large, you can see that there is at least some willingness to take risks.
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What does the data tell me about ownership and insider trading?
Northrop’s shareholders are mainly State Street and Vanguard, which link the shares to global index flows. Active fund managers, such as Capital International and Capital World, have significantly increased their holdings in Northrop shares, probably reflecting their growing confidence in the benefits of defense spending. In contrast, BlackRock and JP Morgan reduced their positions, suggesting that not all institutions share the same optimism.
The activity of insiders, led by CEOs and other executives, seems to favor sales, with symbolic purchases by directors. The lack of insider purchases may indicate that management does not wish to increase its holdings at current valuation levels.
The signals are mixed. Institutional opinion is mixed, but tends to be constructive, while insiders are more cautious. This combination suggests that Northrop is seen as a stable defense company in the long term, but expectations may be more cautious at current levels.
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