Lumen Technologies' (LUMN) stock is gaining ground in Monday's trading following insider buying disclosures. The telecom specialist's share price was up 8% as of 1:15 p.m. ET, according to data from S&P Global Market Intelligence.
Lumen recently submitted filings with the Securities and Exchange Commission (SEC) showing that CEO Kate Johnson and CFO Christopher Stansbury had made significant purchases of company stock. The filings showed that Johnson purchased shares starting on Nov. 2, and Stansbury bought shares on Nov. 3.
Two top execs look bullish on Lumen stock
Legendary investor Peter Lynch once said, "Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise." That might be a bit of a simplification, but insider buying is generally a bullish sign -- and Lumen is making gains on news that two of its most important executives are buying company stock.
Per the filings, CEO Kate Johnson started purchasing shares last Thursday. Johnson purchased exactly 1 million shares of Lumen stock at an average price of $0.97 per share. Meanwhile, Stansbury bought company stock last Friday -- picking up 500,000 shares at an average price of roughly $1.10 per share.
What comes next for Lumen stock?
Lumen has been struggling in 2023, and its share price is currently down roughly 77% across the year's trading, even with today's gains. The company is coming off of a third-quarter report in which earnings came in significantly below expectations, and the company paired the release with the announcement of a debt restructuring deal that added new layers to the telecom's already complicated financial structure.
News that Johnson and Stansbury have made large purchases of Lumen stock suggests a significant vote of confidence from key company insiders. On the other hand, it's also not completely unheard of for insiders to buy shares when their company is struggling in order to send reassuring signals to other investors.
Lumen stock continues to look cheaply valued by some metrics, but there are still plenty of question marks when it comes to the company's ability to orchestrate a successful turnaround.
