What you need to know about the investor mix of Luna Innovations Incorporated (NASDAQ: LUNA)
A look at the shareholders of Luna Innovations Incorporated (NASDAQ: LUNA) can tell us which group is more powerful. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. We also tend to see a decline in insider participation in companies that were previously public.
Luna Innovations is a small company with a market capitalization of US$175 million, so it may still fly under the radar of many institutional investors. Looking at our ownership group data (below), it appears that institutions own shares in the company. Let’s dig deeper into each owner type to learn more about Luna Innovations.
Check out our latest analysis for Luna Innovations
What does institutional ownership tell us about Luna Innovations?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors hold a sizeable share of Luna Innovations. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Luna Innovations’ earnings history below. Of course, the future is what really matters.
Reportedly, 5.4% of Luna Innovations shares are controlled by hedge funds. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Our data shows that Royce & Associates, LP is the largest shareholder with 6.2% of shares outstanding. With 5.9% and 5.4% of the shares outstanding, respectively, BlackRock, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company’s CEO, Scott Graeff, directly owns 1.6% of the total shares outstanding.
A closer look at our ownership figures suggests that the top 18 shareholders hold a combined ownership of 50%, implying that no single shareholder has a majority.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider Ownership of Luna Innovations
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
We can see that insiders hold shares in Luna Innovations Incorporated. As individuals, insiders collectively own $6.7 million of the $175 million company. This shows at least some alignment, but we generally like to see larger insider holdings. You can click here to see if these insiders have been buying or selling.
General public property
The general public, who are typically individual investors, hold a 41% stake in Luna Innovations. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
It is always useful to think about the different groups that own shares in a company. But to better understand Luna Innovations, we need to consider many other factors. For example, we found 2 warning signs for Luna Innovations which you should be aware of before investing here.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and 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 financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.