To get a sense of who really controls The Boeing Company Inc (NYSE: BA), it’s important to understand the company’s ownership structure. And the group that holds the biggest slice of the pie are institutions with 47% ownership. In other words, the group faces the maximum upside potential (or downside risk).
After a year of 30% losses, last week’s 3.5% gain would be welcomed by institutional investors as a likely sign that yields may start to rise.
Let’s take a closer look at what different types of shareholders can tell us about Boeing.
See our latest analysis for Boeing
What does institutional ownership tell us about Boeing?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Boeing already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Boeing’s historic earnings and revenue below, but keep in mind there’s always more to tell.
Hedge funds don’t have a lot of shares in Boeing. Our data shows that The Boeing Company Employee Savings Plans Master Trust is the largest shareholder with 7.5% of shares outstanding. In comparison, the second and third shareholders hold approximately 7.4% and 5.3% of the shares.
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, which means that the company’s shares are widely distributed and there is no dominant shareholder.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Boeing Insider Ownership
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our data suggests that insiders hold less than 1% of The Boeing Company in their own name. It’s a very big company, so it would be surprising to see insiders owning much of the company. Although their stake is less than 1%, we can see that the board members collectively own $99 million worth of stock (at today’s prices). In this kind of situation, it may be more interesting to see whether these insiders have been buying or selling.
General public property
With a 44% stake, the general public, made up mostly of individual investors, has some influence over Boeing. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
While it is worth considering the different groups that own a business, there are other, even more important factors. Know that Boeing shows 2 warning signs in our investment analysis and 1 of them is significant…
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.