Stock Analysis

What Type Of Shareholders Own The Most Number of Lincoln Educational Services Corporation (NASDAQ:LINC) Shares?

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NasdaqGS:LINC
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The big shareholder groups in Lincoln Educational Services Corporation (NASDAQ:LINC) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Lincoln Educational Services is not a large company by global standards. It has a market capitalization of US$184m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Lincoln Educational Services.

Check out our latest analysis for Lincoln Educational Services

ownership-breakdown
NasdaqGS:LINC Ownership Breakdown December 30th 2020

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.

We can see that Lincoln Educational Services does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Lincoln Educational Services, (below). Of course, keep in mind that there are other factors to consider, too.

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NasdaqGS:LINC Earnings and Revenue Growth December 30th 2020

It would appear that 23% of Lincoln Educational Services shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Heartland Advisors, Inc. is currently the largest shareholder, with 10% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.6% and 8.4% of the stock. In addition, we found that Scott Shaw, the CEO has 3.0% of the shares allocated to his name

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 see that insiders own shares in Lincoln Educational Services Corporation. In their own names, insiders own US$17m worth of stock in the US$184m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 19% stake in Lincoln Educational Services. 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.

Private Company Ownership

It seems that Private Companies own 6.7%, of the Lincoln Educational Services stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 3 warning signs for Lincoln Educational Services that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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