BAE Systems is one of the largest arms, aerospace and security companies in the world. Founded in 1999 as a result of the merger of Marconi Electronic Systems and British Aerospace, it is headquartered in London, UK. BAE Systems operates all across Europe and the rest of the world, including Australia, Saudi Arabia, India, the US and other countries. In addition to military products, BAE Systems has been developing technologies for hybrid civilian transport.
When trading the BAES stock, traders should pay attention to fundamental factors. Various events that would lead to an arms buildup could be considered as a bullish factor for BAES. Сountries around the world spend a lot on defence сontracts. If BAE Systems can offer a new product and receive large government contracts, its stock will grow in the long term.
However, government contracts are also a big risk. As a rule, they prescribe strict terms of delivery, and violations of the terms may lead to large penalties and legal costs. For example, in 2015, the US Department of Justice filed a lawsuit against BAE Systems for overpricing. Such events negatively affect the company's reputation and lead to a decrease in the BAES price.
Traders and investors should follow the news regarding BAE Systems. New contracts, ventures, or major acquisitions drive the BAES stock price up. Scandals, on the other hand, affect the BAES price negatively. For example, accusations of bribery in order to obtain contracts in 2009 did just that to the stock.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
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BAE Systems operates through five segments: cyber & intelligence, platforms & services (US), maritime, air, and electronic systems.
BAE Systems' stock is listed on the London Stock Exchange (ticker "BA.LN," primary listing) and traded in the form of American Depositary Receipts on the OTC market in the United States (ticker "BAESY"). The company was quoted for the first time on the London Stock Exchange in February 1981. At that time, the firm's name was British Aerospace Plc. The listing started at the price of 150 pence.
As BAE Systems was formed after a merger, owners of British Aerospace share certificates could transform them into shares of the newly-formed company. Today, ordinary 10p share certificates of British Aerospace are still valid. However, 50p certificates can't be used anymore.
BAE Systems pays dividends to its shareholders twice per year. Although the stock price doesn't seem high, its fluctuations are wide. Therefore, CFD trading may be another option for dealing with the BAE Systems' shares.
If you want to trade a company's stocks successfully, you should care about the overall industrial environment. It can be checked by examining the stability of several companies in the same industry. For instance, BAE Systems' key rivals are Safran, Boeing, Thales, Northrop Grumman, Lockheed Martin, and General Dynamics. Moreover, you should be sure BAE Systems' competitors don't outperform it. Otherwise, demand for its products may decline, which will lead to a fall in the company's sales and stock price.
BAE Systems is included in some stock market indices, including FTSE 100, FTSE 350, STOXX 600, and MSCI Pan Euro. Being a component of stock indices, the company confirms it has a significant share of the market.
However, the share can be negatively affected if BAE Systems is involved in lawsuits. It has already gone through a large number of cases. Competition, government contracting, employment, environment, and safety are the key categories the offenses related to.