Re: [CANSLIM] Institutional Ownership

From: Dimitri Katsaros <dcka@yahoo.com>
Subject: Re: [CANSLIM] Institutional Ownership
Date: Sat, 20 Apr 2002 10:59:08 -0700 (PDT)

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From "Ask IBD"

Question 
  Is there a such a thing as too much management or
inside ownership? Does a small amount of shares
available for public trading outweigh good
fundamentals? 

  Answer 
  A general rule of thumb is that the more stock
management owns, the better. A high level of
management ownership often indicates confidence in
their company. A small amount of shares available to
the public, i.e. the float, does not outweigh good
fundamentals. A small amount of shares can be both
good and bad. If the float is too small, the stock
will probably trade on low volume. This will make it
difficult for institutional investors to buy a
significant size in the stock, so they will more than
likely stay away from it. Since it takes institutional
money to make a stock move, the stock is unlikely to
sustain an advance without institutional support. On
the flip side, a smaller float means it takes less
money to make a stock advance. Often, a secondary
offering of shares can add enough liquidity to the
stock to get institutions to step in and buy it.

To learn more about buying stocks and William J.
O’Neil’s investing strategies please visit our IBD
Learning Center at this link -
http://www.investors.com/learn/B.asp 

Also, go to our Investor's Corner archive entitled
“How Do I Find Winning Stocks?” to view past articles
on this topic -
http://www.investors.com/learn/IC.asp#win 

Our “Ask Bill O’Neil” archive offers a compilation of
Q&A’s on the subject of evaluating stocks at this link
- -
http://www.investors.com/askBill/Search_ByTopic.asp?TopicID=4

- --- Matt & Alicia Leverette <malever@bellsouth.net>
wrote:
> 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
> 

=====
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