Why This Private Equity-Style Fund Just Bet $17 Million on Lumen Technologies Stock
Key Points
Philadelphia-based Penn Capital Management acquired 2.7 million shares of Lumen Technologies for an estimated $16.8 million in the third quarter.
The position represents 1.3% of 13F reportable assets under management at quarter-end.
Though a large purchase, the new stake places Lumen Technologies outside the fund's top five holdings.
- These 10 stocks could mint the next wave of millionaires ›
Philadelphia-based Penn Capital Management Company disclosed a new position in Lumen Technologies (NYSE:LUMN) on Monday, acquiring over 2.7 million shares valued at approximately $16.8 million during the third quarter.
What Happened
According to a filing submitted to the Securities and Exchange Commission on Monday, Penn Capital Management Company disclosed a new position in Lumen Technologies. The fund acquired 2,744,057 shares during the third quarter, bringing its total holdings in the telecommunications company to approximately $16.8 million at quarter-end.
What Else to Know
Top holdings after the filing:
- NYSE:DY: $25.2 million (1.9% of AUM)
- NYSE:AMTM: $23.1 million (1.8% of AUM)
- NASDAQ:ATEC: $22.8 million (1.8% of AUM)
- NASDAQ:MIRM: $22.6 million (1.7% of AUM)
- NASDAQ:WFRD: $22.3 million (1.7% of AUM)
As of November 21, 2025, shares of Lumen Technologies were priced at $8.09, up 6% over the past year and trailing the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $12.7 billion |
| Net income (TTM) | ($1.7 billion) |
| Price (as of market close Wednesday) | $8.09 |
| One-year price change | (5.75%) |
Company Snapshot
Lumen Technologies operates as a facilities-based communications and technology provider, delivering digital infrastructure and network services. It offers integrated technology and communications services, including cloud, fiber infrastructure, data networking, unified communications, managed security, and traditional voice solutions.
The company leverages its fiber network and technology platforms to support business and residential clients seeking scalable connectivity and IT solutions, with a focus on broadband subscribers and organizations requiring advanced connectivity and IT services. Lumen generates revenue by providing enterprise and mass-market customers with recurring service contracts and infrastructure-based solutions, leveraging its extensive fiber network and technology platforms.
Foolish Take
For long-term investors, Penn Capital’s new position in Lumen is notable because it aligns with the firm’s strategy of targeting deeply discounted companies that are restructuring toward a healthier balance sheet. Lumen’s turnaround has been uneven, but the latest quarter showed flashes of real operational progress: Revenue and adjusted EBITDA both beat expectations, free cash flow excluding special items climbed to $1.7 billion (from $1.2 billion a year earlier), and the company closed major debt refinancing steps that helped cut annual interest expense by $135 million. The challenge is that the headline GAAP numbers still look rough—Q3 net loss widened to $621 million from $148 million one year earlier as revenue (though above expectations) slipped from $3.2 billion to $3.1 billion.
Penn’s position—about 0.5% of reported assets—sits well below its largest holdings, but the fund typically traffics in micro- and small-cap names where it sees upside. Lumen, meanwhile, is a company in transition with a long-depressed valuation, and the scale of this bet suggests that Penn views the company’s transformation as a catalyst that could support some upside. Shares have risen 6% over the past year but continue to lag the broader market.
Glossary
Stake: The ownership interest or investment a fund or individual holds in a company.
13F reportable assets: Assets that institutional investment managers must disclose quarterly to the Securities and Exchange Commission (SEC) on Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Top holdings: The largest investments in a fund's portfolio, usually ranked by value.
Facilities-based provider: A company that owns and operates its own network infrastructure rather than leasing it from others.
Fiber infrastructure: High-speed communication networks using optical fiber cables to transmit data.
Unified communications: Integrated communication services such as voice, video, messaging, and conferencing for businesses.
Managed security: Outsourced services that monitor and protect a company's digital assets and networks.
Recurring service contracts: Agreements where customers pay regularly for ongoing services, often monthly or annually.
Quarter-end: The last day of a fiscal quarter, used as a reference point for financial reporting.
Trailing: A performance measure comparing an asset's return to a benchmark over a past period.
TTM: The 12-month period ending with the most recent quarterly report.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,002%* — a market-crushing outperformance compared to 193% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
See the stocks »
*Stock Advisor returns as of November 24, 2025
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amentum. The Motley Fool has a disclosure policy.
Recommended Articles
