Lumen(NYSE: LUMN) stock posted explosive gains in Thursday's trading. The telecom company's share price closed out the daily session up 10.1%, according to data from S&P Global Market Intelligence.
Lumen soared today following a new disclosure filing that was submitted to the Securities and Exchange Commission (SEC). The filing showed that an investor named Daniel Hagan now owns a large position in the company. Hagan is not a widely known public figure or a household name in the investing world, so why did the recent filing trigger such a big valuation increase for the stock?
A little-known investor stakes a huge bet on Lumen
Through the filing with the SEC yesterday, it was revealed that Hagan owned 55 million shares of Lumen, working out to 5.4% of the company's common stock. When investors or institutions come to own 5% of a company's stock, they must file a disclosure of their position. This suggests that Hagan has acquired a large amount of Lumen stock lately.
News that large investors are buying up stock can help spur additional bullish momentum, and there may be another reason why investors seem to be so excited about Hagan's involvement. The investor has previously owned large enough positions in AMC Networks, Jackson Financial, and Lincoln National to trigger disclosure requirements, and subsequent divestiture disclosures suggest that he's had a high rate of success with previous bets.
What comes next for Lumen stock?
Lumen stock has posted massive gains across 2024's trading thanks to recent contracts wins to provide high-speed fiber-network solutions and support services for Microsoft and other players in the artificial intelligence (AI) space. Verizon's recent announcement that it will be buying Frontier Communications has also provided a recent boost and new layer of support for the company's valuation.
On the other hand, Lumen still has a big debt problem, and it's going through a complicated restructuring and comeback process. While the stock could continue to soar if the business continues landing AI-related deals or attracts significant acquisition interest, it's riskier than it looks despite the company continuing to trade at less than half this year's expected sales.
Should you invest $1,000 in Lumen Technologies right now?
Before you buy stock in Lumen Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lumen Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $716,375!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 9, 2024
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
