Luna Innovations Incorporated (NASDAQ:LUNA) most popular amongst individual investors who own 45% of the shares, institutions hold 45%
The considerable ownership by individual investors in Luna Innovations indicates that they collectively have a greater say in management and business strategy
49% of the business is held by the top 25 shareholders
A look at the shareholders of Luna Innovations Incorporated (NASDAQ:LUNA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 45% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Luna Innovations, beginning with the chart below.
Check out our latest analysis for Luna Innovations
What Does The Institutional Ownership Tell Us About Luna Innovations?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Luna Innovations does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Luna Innovations' historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 5.5% of Luna Innovations shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Royce & Associates, LP with 5.8% of shares outstanding. With 5.5% and 4.7% of the shares outstanding respectively, ACK Asset Management LLC and AMH Equity, Ltd. are the second and third largest shareholders. Additionally, the company's CEO Scott Graeff directly holds 1.6% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Luna Innovations
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in Luna Innovations Incorporated. It has a market capitalization of just US$205m, and insiders have US$8.3m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for Luna Innovations (1 is significant) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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