Exploring AAR Corp. (AIR) Investor Profile: Who’s Buying and Why?

You're looking at AAR Corp. (AIR) and asking the right question: who is buying this stock and why are they so confident in an aerospace services company right now? The answer is simple: the smart money is betting on the necessity of maintenance, repair, and overhaul (MRO) in a world of aging aircraft and constrained new-build capacity. Institutional investors, including giants like BlackRock, Inc. and The Vanguard Group, Inc., collectively own over 90% of the stock, a clear signal of conviction in the long-term fundamentals.

But what does that mean for you? It means they see the value in a company that just delivered a record fiscal year 2025 with sales hitting $2.8 billion, a 20% increase over the prior year, and Adjusted EBITDA of $324 million. This growth isn't just market luck; it's driven by strategic moves, like divesting the low-margin Landing Gear Overhaul business and focusing on high-growth Parts Supply, which is benefiting from the global commercial fleet aging out. Honestly, if you want to understand where the next leg of growth comes from-and how AAR Corp. plans to turn that 11.8% Adjusted EBITDA margin into a premium valuation-you need to look past the top-line numbers and into the specific investment thesis of these major shareholders.

Who Invests in AAR Corp. (AIR) and Why?

If you're looking at AAR Corp. (AIR), you're looking at a stock overwhelmingly dominated by professional money managers. The direct takeaway is that institutional investors own the vast majority of shares, and their motivation is centered on the company's strong growth in the Maintenance, Repair, and Overhaul (MRO) sector, not a high dividend yield.

This is a story of institutional conviction. Active and passive funds hold around 95.63% of the shares outstanding, leaving a small slice-just 4.36%-for public companies and retail investors. This concentration means the stock's movement is heavily influenced by the quarterly portfolio shifts of large institutions, so you need to pay attention to their buying and selling patterns. That's a huge chunk of shares in professional hands.

Key Investor Types: The Institutional Giants

The ownership breakdown for AAR Corp. is a classic example of a mid-cap stock with a clear institutional preference. The largest holders are the behemoths of the asset management world, primarily passive index funds and large mutual funds. This structure points to a stock that is a key component of various small-cap and aerospace-focused exchange-traded funds (ETFs) and mutual funds.

• Mutual Funds & ETFs: Hold the largest block at approximately 59.13% of shares.
• Other Institutional Investors: Account for about 36.50% of the shares.
• Retail/Public Investors: Hold the remaining 4.36%.

The top institutional holders as of mid-2025 include BlackRock, Inc., with around 5.57 million shares, and The Vanguard Group, Inc., holding approximately 3.83 million shares. These firms are often passive investors, meaning they buy and hold as long as AAR Corp. remains in their benchmark index, like the S&P SmallCap 600. This provides a solid, long-term demand floor for the stock.

Investment Motivations: Growth Over Yield

Investors are attracted to AAR Corp. for its exposure to the booming aerospace aftermarket, especially its position in the MRO segment (Maintenance, Repair, and Overhaul). The financials from the fiscal year 2025 tell a clear story of growth and margin expansion, which is the primary magnet for capital.

Here's the quick math on what's driving the interest:

The company's strategy of focusing on higher-margin activities, like completing the Product Support acquisition and divesting its lower-margin Landing Gear Overhaul business, has clearly paid off in the numbers. The improved adjusted EBITDA margin of 11.8% in FY2025, up from 10.4% the prior year, shows operational efficiency is improving. This is what active managers love to see: a management team executing a margin-expansion plan. You can dive deeper into the company's fundamentals by checking out Breaking Down AAR Corp. (AIR) Financial Health: Key Insights for Investors.

Investment Strategies: Long-Term Growth and Value

The strategies at play are a blend of long-term holding and targeted value-growth investing. Because AAR Corp. operates in a cyclical industry, the institutional money tends to be patient, focusing on the long-term secular tailwinds.

The primary strategies observed are:

• Long-Term Holding (Passive): Funds like Vanguard and BlackRock are essentially locked in, providing stability. This is a buy-and-hold for the duration of the aerospace cycle.
• Value and Growth-at-a-Reasonable-Price (GARP): Many active managers see AAR Corp. as a way to participate in the MRO market, which is expected to grow to a massive $199 billion in 2025, surpassing its 2019 peak. They are betting on the company's ability to capture market share and expand capacity, like the announced MRO facilities in Miami and Oklahoma, which are estimated to add 15% in capacity.
• Momentum/Short-Term Trading: While less dominant, the stock's moderate volatility and strong accumulation score suggest some hedge funds and quantitative strategies are trading on the positive earnings momentum. The consensus analyst rating is a 'Buy' as of November 2025, with a price target of $89.33, which defintely attracts short-term capital.

The lack of a substantial dividend yield means this is not a stock for income-focused investors; it's strictly a play on capital appreciation driven by operational excellence and industry tailwinds.

Institutional Ownership and Major Shareholders of AAR Corp. (AIR)

If you're looking at AAR Corp. (AIR), the first thing to understand is that the stock is overwhelmingly controlled by professional money managers. This isn't a retail-driven stock; it's a battleground for institutions. As of the end of the third quarter of 2025, institutional investors own an astounding 92.68% of the total shares outstanding. That's a massive concentration of capital, meaning their decisions, not yours or mine, drive the stock's daily price action.

This high percentage, over 9 out of every 10 shares, signals a strong, long-term belief in AAR Corp.'s position in the aerospace and defense market, particularly its Maintenance, Repair, and Overhaul (MRO) business. It also means the float-the shares available for public trading-is quite small, which can lead to higher volatility when large blocks of stock are traded.

Top Institutional Investors: Who Holds the Keys?

The list of AAR Corp.'s largest shareholders reads like a directory of the world's biggest asset managers. These aren't small hedge funds; they are the behemoths of the financial world, primarily holding the stock for their massive index and mutual funds.

Here's the quick math on the top holders as of September 30, 2025, which represents the most recent quarterly filing data:

BlackRock, Inc. and The Vanguard Group, Inc. alone control a significant chunk of the company, often due to their index funds that must own shares to mirror the market. But look closely at the third column. That's where the real story is.

Recent Ownership Shifts: The Active Money is Moving

While the index fund giants like BlackRock and Vanguard saw minor decreases in their holdings in the third quarter of 2025-a common rebalancing move-the more interesting action comes from the active managers. This is where you see conviction.

In the most recent quarter, 161 institutional holders increased their positions, while 134 decreased them. The net activity is bullish, but it's not uniform.

• Massive Accumulation: Wellington Management Group Llp was a huge buyer, increasing its stake by a staggering 144.3%, adding 878,188 shares. This is a strong vote of confidence in AAR Corp.'s future performance.
• Significant Buys: Franklin Resources Inc. also showed high conviction, boosting its shares by 36.927%, or 311,258 shares.
• Notable Sales: On the flip side, Westwood Holdings Group Inc. cut its position by -23.39%, selling 363,816 shares.

When you see this kind of divergence, it tells you the market is grappling with different views on the company's valuation or its near-term growth trajectory. A big buy like Wellington's suggests they see a clear runway for growth, possibly tied to the company's recent strategic moves, which you can read more about in Breaking Down AAR Corp. (AIR) Financial Health: Key Insights for Investors.

The Impact of Institutional Clout on Strategy and Stock

With over 90% institutional ownership, these large investors play a crucial, two-fold role. First, they provide stability. Their sheer size means they aren't quick to panic, which helps dampen volatility compared to stocks with high retail ownership. Second, they exert significant influence on management.

When institutions hold this much stock, they become the primary audience for the CEO and the board. Their focus is on capital allocation, long-term strategy, and operational efficiency. They push for things like share buybacks, strategic acquisitions, and clear paths to margin expansion. AAR Corp.'s strong financial position, with a Price-to-Earnings ratio of around 18.70x, is a direct result of management executing a strategy that appeals to this sophisticated investor base. Their buying and selling patterns, especially the large block trades, can definitely affect the stock price, so watching 13F filings is defintely a key part of your due diligence.

Key Investors and Their Impact on AAR Corp. (AIR)

If you're looking at AAR Corp. (AIR), the first thing to understand is that institutional money drives this stock. Professional investors-the big funds-own a massive chunk of the company, holding approximately 90.74% of the outstanding shares. This high level of institutional ownership means the stock movements are less about individual retail investors and more about the large-scale buying and selling decisions of major asset managers like Blackrock, Inc. and Vanguard Group Inc.

This institutional dominance signals a belief in AAR Corp.'s core strategy: focusing on the high-growth, high-margin aviation aftermarket services, especially in Parts Supply and Repair & Engineering. To be fair, this high ownership also means the stock can be volatile when a few large funds decide to rebalance their positions.

The Major Players: Who Owns AAR Corp. (AIR)?

The top investors are mostly passive index and large active management funds, which provide a stable base of capital but still adjust their positions based on performance and portfolio strategy. As of the end of the third calendar quarter of 2025 (September 30, 2025), the largest holders showed a mixed picture of slight trimming and strategic accumulation.

Here's the quick math on the top institutional holders and their recent activity:

You can see that while the largest two holders, Blackrock, Inc. and Vanguard Group Inc., made minor reductions, State Street Corp. was actively adding to its stake, increasing its position by over three percent. This suggests a divergence in conviction, but the overall institutional presence remains incredibly strong. Smaller, more active managers like Campbell & CO Investment Adviser LLC also established a new position of 25,101 shares in the second quarter, valued at approximately $1.73 million.

Investor Influence and Strategic Alignment

The collective influence of these investors is less about activism and more about capital allocation pressure, which has led AAR Corp. to make clear strategic moves in its fiscal year 2025. The company's full-year 2025 sales hit a record $2.8 billion, with adjusted diluted earnings per share (EPS) rising to $3.91, up 17% from the previous year. These numbers are the language the major funds listen to.

The company's actions directly reflect a commitment to the 'pure-play' aftermarket services model that investors favor for its higher margins:

• Divestiture: AAR Corp. sold its lower-margin Landing Gear Overhaul business for $51 million to sharpen its focus.
• Acquisition: The acquisition of HAECO Americas for $78 million in November 2025 immediately expanded its Maintenance, Repair, and Overhaul (MRO) footprint, a key growth area.
• Capital Raise: The follow-on equity offering, raising approximately $249 million by selling 3,000,000 shares, was explicitly to boost financial flexibility for future growth, a move that investors watch closely for dilution risk.

The recent acquisition of HAECO Americas, for example, is a clear signal to investors that management is executing on its plan to grow the Repair & Engineering segment and build a defensible competitive moat. If you want to dive deeper into the fundamentals backing these decisions, you should check out Breaking Down AAR Corp. (AIR) Financial Health: Key Insights for Investors.

Recent Insider and Institutional Moves to Watch

One notable move that requires attention is insider selling. CEO John Mcclain Holmes III sold 38,462 shares in early November 2025 for a total value of approximately $3.21 million. While this sale reduced his position by nearly 13%, insider selling isn't always a red flag, but it's defintely a data point you can't ignore, especially when the stock is trading near its 52-week high of $89.69.

On the institutional side, the overall trend is one of stability, with a few large funds making minor trims after a period of strong stock performance. The fact that institutional investors are holding on to over 90% of the company, despite a high price-to-earnings (P/E) ratio of 104.62, suggests they see a long runway for growth, driven by the company's adjusted EBITDA of $324 million in fiscal year 2025 and its strategic focus on parts and MRO.

Market Impact and Investor Sentiment

You're looking for a clear read on AAR Corp. (AIR) and its major backers, and the picture is one of cautious optimism, heavily influenced by institutional conviction and strong fiscal year 2025 performance. The consensus among Wall Street analysts is a 'Moderate Buy,' which reflects both the company's solid fundamentals and the typical volatility of the aerospace sector.

Institutional investors-the big money managers-hold an enormous stake, with approximately 90.74% of the stock currently owned by institutions and hedge funds. This high percentage suggests that the company's strategic direction and long-term growth narrative are defintely well-supported by professional capital. When institutional ownership is this concentrated, their buying and selling patterns can have a magnified effect on the stock price, so you need to watch their moves closely.

The Big Holders: Who's Buying and Why

The investor profile of AAR Corp. is dominated by passive index funds and large asset managers, which speaks to its inclusion in key small-cap and aerospace-focused exchange-traded funds (ETFs). These investors are buying because AAR Corp. is a leading independent provider in the aviation aftermarket, a sector with strong tailwinds from an aging global aircraft fleet and increasing outsourcing of maintenance, repair, and overhaul (MRO) services. Here's a quick look at the top institutional players as of the September 30, 2025, filings:

• BlackRock, Inc.: Holds over 5.52 million shares, valued at approximately $451.9 million.
• The Vanguard Group, Inc.: Holds over 3.77 million shares, valued at approximately $309.1 million.
• Dimensional Fund Advisors LP: Holds over 2.00 million shares.

These firms are essentially buying the market, but their sheer size provides a stable, long-term floor for the stock. You can find more detail on the company's long-term vision in their Mission Statement, Vision, & Core Values of AAR Corp. (AIR).

Recent Market Reactions and Ownership Shifts

The market has reacted predictably to both good news and capital structure changes in 2025. For instance, following the strong Q4 fiscal year 2025 earnings report in July 2025, where the company posted an earnings per share (EPS) of $1.16 (beating the forecast of $1.00) and revenue of $755 million, the stock climbed 2.03% in aftermarket trading. That's a clear sign of investor confidence in operational execution.

But, when AAR Corp. announced a public offering of 3 million shares in September 2025, the stock dropped 6.4% in after-hours trading. Here's the quick math: more shares mean dilution for existing shareholders, and the market prices that in immediately. Also, while CEO John Mcclain Holmes III sold 38,462 shares for about $3.21 million in November 2025, this was a relatively small reduction (about 12.88% of his stake) and is often viewed as routine portfolio management, not a red flag.

Analyst Perspectives: The Impact of Investor Confidence

The analyst community is generally bullish, which is a direct consequence of the company's strategic moves, like the acquisition of HAECO Americas for $78 million in November 2025, which expands their maintenance footprint. Analyst ratings directly influence institutional buying, so this matters. The current average 12-month price target is $89.33, with a high target of $93.00.

What this estimate hides is the potential for further margin expansion. The company's adjusted EBITDA margin improved by 140 basis points to 11.8% in fiscal year 2025, and analysts are betting on that trend continuing. The consensus rating of 'Moderate Buy' is based on the following recent actions:

The recent downgrade to 'Hold' by Zacks Research in late October is a good reminder that not everyone is unanimously positive, but the overall sentiment remains tilted toward buying, driven by the company's strong position in the growing aviation aftermarket.