Illinois Tool Works (ITW): Ownership Signals Point to Long-Term Stability
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Illinois Tool Works (NYSE: ITW), a cornerstone of American industry since 1912, continues to attract a stable base of long-term investors, according to recent analysis of shareholder activity and insider trading. The diversified global manufacturer, with a market capitalization of approximately $72.4 billion and shares recently trading around $250, boasts exceptional profitability and a track record of consistent returns.
A Legacy of Performance and Stability
Founded by Byron L. Smith, ITW has evolved into a major player in industries ranging from automotive and welding to food equipment and construction. The company’s success is underpinned by robust financial metrics, including gross margins of 43.9% and EBIT margins of 26.4%. “ITW stands out for its ability to generate high returns on capital,” noted one analyst, highlighting its disciplined approach to portfolio management and strong free cash flow. This financial strength has allowed ITW to operate more like a reliable compounder than a cyclical business.
Who Owns Illinois Tool Works?
ITW’s shareholder base is characterized by a concentration of passive indexing giants, long-term insurance capital, and the enduring holdings of the Smith family. This structure provides a foundation of stability, while activity from active managers offers more granular insights into investor sentiment.
Here’s a breakdown of the largest shareholders as of the latest reporting:
- The Vanguard Group: 26,568,975 shares (9.16%), valued at approximately $6.63 billion. Vanguard recently reduced its position by 28,698 shares (0.11%).
- Briar Hall Management (Smith family): 25,838,730 shares (8.91%), valued at approximately $6.45 billion. The Smith family has maintained its holdings with no reported changes.
- State Farm Insurance Companies: 21,812,600 shares (7.52%), valued at approximately $5.45 billion. State Farm has also held steady with no reported changes.
- BlackRock Institutional Trust: 14,013,027 shares (4.83%), valued at approximately $3.49 billion. BlackRock reduced its stake by 128,520 shares (0.91%).
- State Street Investment Management: 12,444,647 shares (4.29%), valued at approximately $3.11 billion. State Street trimmed its position by 31,663 shares (0.25%).
- Northern Trust Global Investments: 8,245,605 shares (2.84%), valued at approximately $2.06 billion. This firm reduced its holdings by 4,115 shares (0.05%).
- Geode Capital Management: 6,760,350 shares (2.33%), valued at approximately $1.69 billion. Geode Capital cut its stake by 5,190 shares (0.08%).
- Wells Fargo Advisors: 6,544,240 shares (2.26%), valued at approximately $1.63 billion. Wells Fargo reduced its position by 117,750 shares (1.77%).
- Capital Research Global Investors: 4,493,555 shares (1.55%), valued at approximately $1.12 billion. This investor increased its holdings by 131,702 shares (3.02%).
- MFS Investment Management: 3,702,960 shares (1.28%), valued at approximately $924.6 million. MFS reduced its stake by 66,957 shares (1.78%).
- Fisher Investments: 3,650,562 shares (1.26%), valued at approximately $911.5 million. Fisher Investments added 55,416 shares (1.54%).
- Norges Bank (NBIM): 3,324,117 shares (1.15%), worth approximately $830 million. Norges Bank increased its position by 144,234 shares (4.54%).
Hedge Fund Activity Signals Optimism
Recent activity from hedge funds suggests growing confidence in ITW’s long-term prospects. Squarepoint Capital significantly expanded its stake, indicating a potential improvement in risk-reward conditions. GAMCO, led by Mario Gabelli, continued to increase its holdings, reflecting a long-held preference for durable, high-yield industrial businesses. Additionally, investment entities associated with Robert have incrementally increased their exposure, aligning with ITW’s profile as a stable cash generator.
Insider Trading: A Picture of Stability
Recent insider transactions at Illinois Tool Works have been relatively small and mixed, offering limited directional signals. Randall J. Scheuneman (Officer/Director) sold or gave away 6,802 shares on October 9, 2025, at prices ranging from $128 to $265.08, potentially related to administrative adjustments. Other insider activity included small gifts of shares from Ernest Scott Santi and David Byron Smith Jr., and minor transactions from Darrell L. Ford and Jennifer Kaplan Schott. “Overall, insider behavior reflects stability rather than a strong conviction either way,” one source commented.
The Bottom Line: A Reliable Compounder
The data paints a clear picture: Illinois Tool Works remains a favored holding among long-standing institutions prioritizing consistent performance and predictable cash flow. The balanced activity of active investors, coupled with increasing interest from sophisticated hedge funds, reinforces the view that ITW is a reliable compounder with potential for continued growth.
Investors seeking to evaluate ITW’s potential can utilize tools like TIKR’s new valuation model, which estimates potential stock prices based on revenue growth, operating margins, and P/E multiples.
