Lincoln Educational Services Corporation's (NASDAQ:LINC) large institutional owners must be happy as stock continues to impress, up 9.9% over the past week

Key Insights

• Significantly high institutional ownership implies Lincoln Educational Services' stock price is sensitive to their trading actions
• 51% of the business is held by the top 16 shareholders
• Recent sales by insiders

Every investor in Lincoln Educational Services Corporation (NASDAQ:LINC) should be aware of the most powerful shareholder groups. With 57% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 9.9% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The one-year return on investment is currently 76% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of Lincoln Educational Services, beginning with the chart below.

See our latest analysis for Lincoln Educational Services

What Does The Institutional Ownership Tell Us About Lincoln Educational Services?

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.

Lincoln Educational Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Lincoln Educational Services' historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Our data indicates that hedge funds own 8.9% of Lincoln Educational Services. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Juniper Investment Company, LLC is currently the company's largest shareholder with 8.9% of shares outstanding. With 6.2% and 4.7% of the shares outstanding respectively, BlackRock, Inc. and Heartland Advisors, Inc. are the second and third largest shareholders. Furthermore, CEO Scott Shaw is the owner of 3.3% of the company's shares.

After doing some more digging, we found that the top 16 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Lincoln Educational Services

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders do own shares in Lincoln Educational Services Corporation. As individuals, the insiders collectively own US$37m worth of the US$542m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

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. Take risks for example - Lincoln Educational Services has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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.