Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Institutional Ownership
Date: Sat, 20 Apr 2002 14:22:08 -0400
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Institutional investors come in all colors, shapes and sizes. Venture =
capitalists are most frequently found in private companies, but are also =
found in publicly traded companies. Mutual funds that are publicly =
traded most likely will only buy into public companies, but a private =
fund is not so restricted.=20
From what I have seen, most institutional investors that participate in =
an IPO sell the same day. But will often / usually buy back in later =
that day or in following days. It's the way the game is played, and =
makes the "P" in IPO such a mockery, and prevents the real public =
getting a piece of hot IPOs. Since mutual funds don't report their =
holdings on a daily basis (one change I think is badly needed in the =
securities industry), you never know what they really own, or from when. =
Best you can do is their quarterly report of holdings, but they may have =
only bought that for window dressing a day or so before the quarter =
ended, and sold it a few days later.
Young companies will often do a private placement, most or all of which =
goes to institutional investors. EPIQ did this on 12/31/00, and most of =
the deal was taken by Warburg Pinkus Emerging Growth fund. Shares were =
restricted for two years, but the restriction was lifted only six months =
later and Warburg sold out. No loyalty. Warburg owned zero before the =
deal, and never supported the stock in the public trading.
Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----=20
From: Ira Post=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 1:09 PM
Subject: Re: [CANSLIM] Institutional Ownership
Tom, that's an interesting point that I hadn't considered. But still, =
while there may be considerable institutional ownership prior to the =
initial offering, aren't most institutions going to weigh in after the =
stock goes public? What do you think?
Ira
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 10:49 AM
Subject: Re: [CANSLIM] Institutional Ownership
Hi Ira,
I would be careful about your thinking with institutional ownership of =
new IPOs. Unless you get your hands on a copy of the prospectus for the =
IPO offering, don't be confident that the data on institutional =
ownership available on the internet is accurate. Many new companies =
start life publicly with considerable institutional ownership from =
venture capitalists. And since mutual funds only report quarterly, data =
on their ownership is usually outdated.
Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
----- Original Message -----=20
From: Ira Post=20
To: canslim@lists.xmission.com=20
Sent: Saturday, April 20, 2002 10:39 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
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<DIV><FONT face=3DArial>Institutional investors come in all colors, =
shapes and=20
sizes. Venture capitalists are most frequently found in private =
companies, but=20
are also found in publicly traded companies. Mutual funds that are =
publicly=20
traded most likely will only buy into public companies, but a private =
fund is=20
not so restricted. </FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>From what I have seen, most institutional =
investors that=20
participate in an IPO sell the same day. But will often / usually buy =
back in=20
later that day or in following days. It's the way the game is played, =
and makes=20
the "P" in IPO such a mockery, and prevents the real public getting a =
piece of=20
hot IPOs. Since mutual funds don't report their holdings on a daily =
basis (one=20
change I think is badly needed in the securities industry), you never =
know what=20
they really own, or from when. Best you can do is their quarterly report =
of=20
holdings, but they may have only bought that for window dressing a day =
or so=20
before the quarter ended, and sold it a few days later.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Young companies will often do a private =
placement, most or=20
all of which goes to institutional investors. EPIQ did this on 12/31/00, =
and=20
most of the deal was taken by Warburg Pinkus Emerging Growth fund. =
Shares were=20
restricted for two years, but the restriction was lifted only six months =
later=20
and Warburg sold out. No loyalty. Warburg owned zero before the deal, =
and never=20
supported the stock in the public trading.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A><BR>AIM:=20
TexWorley</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dip108@yahoo.com href=3D"mailto:ip108@yahoo.com">Ira Post</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Saturday, April 20, 2002 1:09 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] Institutional Ownership</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Tom, that's an interesting point that I =
hadn't=20
considered. But still, while there may be considerable =
institutional=20
ownership prior to the initial offering, aren't most institutions going =
to weigh=20
in after the stock goes public? What do you think?</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=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</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 =
10:49=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>Hi Ira,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I would be careful about your thinking with=20
institutional ownership of new IPOs. Unless you get your hands on a =
copy of=20
the prospectus for the IPO offering, don't be confident that the data =
on=20
institutional ownership available on the internet is accurate. Many =
new=20
companies start life publicly with considerable institutional =
ownership from=20
venture capitalists. And since mutual funds only report quarterly, =
data on=20
their ownership is usually outdated.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV>Tom Worley<BR><A=20
=
href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A><BR>AIM:=20
TexWorley</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dip108@yahoo.com href=3D"mailto:ip108@yahoo.com">Ira Post</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Saturday, April 20, 2002 10:39 AM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] Institutional Ownership</DIV></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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