Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Institutional Ownership
Date: Sat, 20 Apr 2002 09:55:29 -0500
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Morning Ira,
Yes, the A/D ranking is weighted so that more recent periods in the 13 =
weeks used are weighted more heavily. At one time, I tried to get a more =
specific description from DailyGraphs Support, but they were unwilling =
to give away the double-secret-formula, so we don't really know *how* it =
is weighted. One thing I've learned with A/D is that it's very useful =
for buying, but because it is a weighted moving average, its lousy for =
selling. In other words, a stock could easily be going through a =
blow-off top or other form of topping action and the darned A/D ranking =
will sit there with an A or B the whole time. Makes sense, its a lagging =
indicator that describes 13 weeks past action.
I think what you've described as a preference is actually very =
CANSLIMish. If you find a stock with all the CANSLIM evidence early =
enough, the rising price and rising AvgVol are giving clues that =
institutions are likely accumulating it. The SEC reporting lags so much =
that by the time you see it in the % institutional ownership numbers, =
much of it has already happened. Folks like Ian and Tom are good at =
spotting this. I generally don't notice it until the stock has moved out =
of the initial round of buying because my radar doesn't look below =
certain price points. Mark Boucher of TradingMarkets.com is very good at =
this as well, preferring to catch stocks that have nearer 10% ownership. =
You've got to have really good radar and chart reading skills to find =
these, but as you can see from Ian and Tom's returns over the last =
couple of years, its radar worth developing.
Katherine
----- Original Message -----=20
From: Ira Post=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 9:39 AM
Subject: Re: [CANSLIM] Institutional Ownership
Good morning Katherine,
Thanks for the clarification. One question. Is the A/D rating =
weighted to give more empahsis on current purchases and sales?
Another point on institutional ownership - although it's not a CANSLIM =
approach. When I find a company that's recently gone public and looks =
very good fundamentally, I look at the lack of insititutional ownership =
as an advantage. This is because it won't take these institutions very =
long to find out about the company and when they buy in, the price will =
soar. This was part of my thinking with AMGP.
Ira
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 10:07 AM
Subject: Re: [CANSLIM] Institutional Ownership
Hi Ira,
Just a point of clarification on the A/D rating vs. Institutional =
Ownership--
The A/D rating is a weighted ranking on the recent price/volume =
action of the stock. IBD looks for accumulation (up days on volume =
higher than the previous day) of large blocks of stock vs distribution =
(down days on volume higher than the day before) of large blocks and =
then creates a ranking A-E. In that sense, you are right, that when =
large blocks are being accumulated more than they are distributed, the =
stock would rank very high. This is a proxy for current institutional =
price/volume action but does not address, in general, what % of the =
shares in float are *owned* by institutions. For example, 2 stocks could =
have an A/D rating of A, yet one could be 10% owned by institutions =
while the other could be 80% owned by institutions.
On institutional ownership, Matt--
I've noticed large discrepancies like this in the Yahoo/MarketGuide =
data and the DGO data before. As a cautionary approach, if you see a =
high number like 80-90% as you saw for ANSS, it's probably an error in =
their data (I think their shares outstanding in the calculation aren't =
updated to reflect share buy backs, primary offers, etc). Sure enough, =
DGO has banks owning 14% and funds owning 30% of the float for a total =
institutional ownership of 44% of the 13.4m shares in the float. The =
remaining 1m shares outstanding are owned by management (7% of =
outstanding). Though that's what I'd consider the higher end of the =
"acceptable" range, I never let that keep me away from a stock if I feel =
it has everything else going for it, especially when the float is rather =
small.
Katherine
----- Original Message -----=20
From: Ira Post=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 2:57 AM
Subject: Re: [CANSLIM] Institutional Ownership
I think you got that information from Yahoo. If you go to the IBD =
site and do a stock check-up, you'll find an Accumulation/Distribution =
(Acc/Dis) Rating of B-. I think the discrepancy has to do with IBD's =
more recent monitoring of this information and their taking into account =
of more recent institutional buying or selling.
WON feels this is very important. However, IBD's stock check-up =
gives this stock an overall rating of A+. So I wouldn't worry about it =
the B- in this area. The significance lies in the fact that =
institutions control large blocks of money and when they move into or =
out of a stock it influences the price significantly.
Ira
----- Original Message -----=20
From: Matt & Alicia Leverette=20
To: canslim@lists.xmission.com=20
Sent: Friday, April 19, 2002 9:35 PM
Subject: [CANSLIM] Institutional Ownership
Hi,
I have been considering ANSS. It is rated a 98 on IBD Stock =
Checkup and it's chart looks pretty good to me. Also, I have noticed =
other stocks within it's group have been doing well of late.
My question has to do with Institutional Ownership. ANSS is at =
81% (89% of Float). I know this is high, but how important of a factor =
is this.
I would love some thoughts.
Matt
- ------=_NextPart_000_0065_01C1E851.811AD960
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<META http-equiv=3DContent-Type content=3D"text/html; =
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<DIV>Morning Ira,</DIV>
<DIV> </DIV>
<DIV>Yes, the A/D ranking is weighted so that more recent periods in the =
13=20
weeks used are weighted more heavily. At one time, I tried to get a =
more=20
specific description from DailyGraphs Support, but they were =
unwilling=20
to give away the double-secret-formula, so we don't really know *how* it =
is=20
weighted. One thing I've learned with A/D is that it's very useful for =
buying,=20
but because it is a weighted moving average, its lousy for selling. In =
other=20
words, a stock could easily be going through a blow-off top or other =
form of=20
topping action and the darned A/D ranking will sit there with an A or B =
the=20
whole time. Makes sense, its a lagging indicator that describes 13 weeks =
past=20
action.</DIV>
<DIV> </DIV>
<DIV>I think what you've described as a preference is actually very =
CANSLIMish.=20
If you find a stock with all the CANSLIM evidence early enough, the =
rising price=20
and rising AvgVol are giving clues that institutions are likely =
accumulating it.=20
The SEC reporting lags so much that by the time you see it in the %=20
institutional ownership numbers, much of it has already happened. Folks =
like Ian=20
and Tom are good at spotting this. I generally don't notice it until the =
stock=20
has moved out of the initial round of buying because my radar doesn't =
look below=20
certain price points. Mark Boucher of TradingMarkets.com is very good at =
this as=20
well, preferring to catch stocks that have nearer 10% ownership. You've =
got to=20
have really good radar and chart reading skills to find these, but as =
you can=20
see from Ian and Tom's returns over the last couple of years, its radar =
worth=20
developing.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dip108@yahoo.com href=3D"mailto:ip108@yahoo.com">Ira =
Post</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, April 20, 2002 =
9:39=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
Institutional=20
Ownership</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Good morning Katherine,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Thanks for the clarification. =
One=20
question. Is the A/D rating weighted to give more empahsis on =
current=20
purchases and sales?</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Another point on institutional =
ownership -=20
although it's not a CANSLIM approach. When I find a company =
that's=20
recently gone public and looks very good fundamentally, I look at the =
lack of=20
insititutional ownership as an advantage. This is because it =
won't take=20
these institutions very long to find out about the company and when =
they buy=20
in, the price will soar. This was part of my thinking with=20
AMGP.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Ira</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, April 20, =
2002 10:07=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
Institutional=20
Ownership</DIV>
<DIV><BR></DIV>
<DIV>Hi Ira,</DIV>
<DIV> </DIV>
<DIV>Just a point of clarification on the A/D rating vs. =
Institutional=20
Ownership--</DIV>
<DIV> </DIV>
<DIV>The A/D rating is a weighted ranking on the recent price/volume =
action=20
of the stock. IBD looks for accumulation (up days on volume higher =
than the=20
previous day) of large blocks of stock vs distribution (down days on =
volume=20
higher than the day before) of large blocks and then creates a =
ranking A-E.=20
In that sense, you are right, that when large blocks are being =
accumulated=20
more than they are distributed, the stock would rank very =
high. This is=20
a proxy for current institutional price/volume action but does =
not=20
address, in general, what % of the shares in float are *owned* by=20
institutions. For example, 2 stocks could have an A/D rating of =
A, yet=20
one could be 10% owned by institutions while the other could be 80% =
owned by=20
institutions.</DIV>
<DIV> </DIV>
<DIV>On institutional ownership, Matt--</DIV>
<DIV>I've noticed large discrepancies like this in the =
Yahoo/MarketGuide=20
data and the DGO data before. As a cautionary approach, if you see a =
high=20
number like 80-90% as you saw for ANSS, it's probably an error in =
their data=20
(I think their shares outstanding in the calculation aren't updated =
to=20
reflect share buy backs, primary offers, etc). Sure enough, DGO has =
banks=20
owning 14% and funds owning 30% of the float for a total =
institutional=20
ownership of 44% of the 13.4m shares in the float. The remaining 1m =
shares=20
outstanding are owned by management (7% of outstanding). Though =
that's=20
what I'd consider the higher end of the "acceptable" range, I =
never let=20
that keep me away from a stock if I feel it has everything else =
going for=20
it, especially when the float is rather small.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dip108@yahoo.com href=3D"mailto:ip108@yahoo.com">Ira =
Post</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, April 20, =
2002 2:57=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
Institutional=20
Ownership</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>I think you got that information =
from=20
Yahoo. If you go to the IBD site and do a stock check-up, =
you'll=20
find an <FONT size=3D3>Accumulation/Distribution (Acc/Dis) Rating =
of=20
B-. I think the discrepancy has to do with IBD's more recent =
monitoring of this information and their taking into account of =
more=20
recent institutional buying or selling.</FONT></FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>WON feels this is very important. =
However,=20
IBD's stock check-up gives this stock an overall rating of =
A+. =20
So I wouldn't worry about it the B- in this area. The =
significance=20
lies in the fact that institutions control large blocks of money =
and when=20
they move into or out of a stock it influences the price=20
significantly.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Ira</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dmalever@bellsouth.net =
href=3D"mailto:malever@bellsouth.net">Matt=20
& Alicia Leverette</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, April 19, =
2002 9:35=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] =
Institutional=20
Ownership</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Hi,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I have been considering =
ANSS. It is=20
rated a 98 on IBD Stock Checkup and it's chart looks pretty good =
to=20
me. Also, I have noticed other stocks within it's group =
have been=20
doing well of late.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>My question has to do with =
Institutional=20
Ownership. ANSS is at 81% (89% of Float). I know =
this is=20
high, but how important of a factor is this.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I would love some =
thoughts.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial=20
=
size=3D2>Matt</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQ=
UOTE></BODY></HTML>
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