Institutional investors have high hopes for Lumen Technologies, Inc. (NYSE:LUMN) with a 66% stake

Key observations

• The significant stakes of institutions in Lumen Technologies mean that they have a significant impact on the company’s share price
• 50% of the company’s shares are owned by the 14 largest shareholders
• Recent Insider Purchases

A look at Lumen Technologies, Inc. (NYSE:LUMN) shareholders can tell us which group is the most powerful. We can see that institutions own the lion’s share of the company, with a 66% stake. This means that this group could gain the most if the stock rises (or lose the most if it falls).

And last week, institutional investors were the biggest winners as the company reached a market capitalization of $6.4 billion. Last week’s gains would further boost the annual shareholder return, which currently stands at 288%.

In the chart below, we take a closer look at the different ownership groups of Lumen Technologies.

See our latest analysis for Lumen Technologies

What does the company’s ownership structure tell us about Lumen Technologies?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock when it’s included in a major index. We’d expect most companies to have some institutions on the register, especially if they’re growing.

As you can see, institutional investors have a fair amount of stake in Lumen Technologies. This means that the analysts working for these institutions have looked at the stock and like it. But like anyone else, they can be wrong. When multiple institutions own a stock, there is always a risk that they are in a “crowded trade.” When one of these trades goes bad, multiple parties can compete to sell the stock quickly. This risk is higher in a company without a history of growth. Below, you can see Lumen Technologies’ historical earnings and revenue, but keep in mind that there is always more to the story.

Since institutional investors hold more than half of the outstanding shares, the board will likely have to pay attention to their preferences. We note that hedge funds do not have a significant investment in Lumen Technologies. Our data shows that BlackRock, Inc. is the largest shareholder with 15% of the shares outstanding. Vanguard Group, Inc. is the second largest shareholder with 12% of the common shares, and State Street Global Advisors, Inc. holds about 6.0% of the company’s shares. Additionally, CEO Kathleen Johnson owns 0.9% of the company’s shares.

A closer look at our ownership data shows that the top 14 shareholders collectively own 50% of the shares, meaning that no single shareholder has a majority of the shares.

While researching institutional ownership of a company can add value to your research, it is also a good idea to research analyst recommendations to better understand the expected performance of the stock. There are a reasonable number of analysts covering the stock, so it can be useful to know their collective view on the future.

Internal property of Lumen Technologies

The definition of an insider may vary slightly by country, but board members always count. The board of a company runs the business, but the CEO will answer to the board, even if he or she is a board member.

Insider ownership is positive when it signals that management is thinking like the true owners of the company. However, high levels of insider ownership can also give enormous power to a small group within the company. In some circumstances, this can be negative.

Our latest data indicates that insiders own some shares in Lumen Technologies, Inc. Insiders have a significant stake worth $138 million. Most would consider this to be a really positive thing. It’s good to see this level of insider investment. You can check here if insiders have been buying recently.

Public property

With a 32% stake, the general public, consisting mostly of individual investors, has some degree of influence over Lumen Technologies. This size of ownership, while significant, may not be enough to change the company’s policy if the decision is not in line with the decisions of other large shareholders.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to better understand Lumen Technologies, we need to consider many other factors. Consider, for example, the ever-present specter of investment risk. We have identified 2 warning signs with Lumen Technologies (at least one significant one), and understanding them should be part of your investment process.

Ultimately the future is the most important. You can access this free report on analyst forecasts for the company.

NB: The figures in this article are calculated using the last twelve months of data, which refer to the 12-month period ending on the last day of the month in which the financial statements are prepared. This may not be consistent with the figures in the annual report for the full year.

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This Simply Wall St article is for general information purposes only. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. 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 your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.