From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2808 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Thursday, August 15 2002 Volume 02 : Number 2808 In this issue: Re: [CANSLIM] Inst Ownership [CANSLIM] The FASB Votes To Continue The Norm Re: [CANSLIM] Inst Ownership Re: [CANSLIM] UCBH Re: [CANSLIM] Inst Ownership ---------------------------------------------------------------------- Date: Thu, 15 Aug 2002 23:34:04 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Inst Ownership This is a multi-part message in MIME format. - ------=_NextPart_000_0277_01C244B4.3DFC1D50 Content-Type: multipart/alternative; boundary="----=_NextPart_001_0278_01C244B4.3DFC1D50" - ------=_NextPart_001_0278_01C244B4.3DFC1D50 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Mutual funds are pretty easy to define and monitor activity = consistently, hence why DGO reports them. They are also required to file = various reports of holdings, so easier to track. Institutionals range = from semi-public pension funds to very private investors. So long as = they don't exceed 5% holdings in a company, it can be very difficult, if = not impossible, to track what they are doing. - ----- Original Message -----=20 From: Gene Ricci=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 15, 2002 11:50 PM Subject: [CANSLIM] Inst Ownership Tom, I agree with you... unfortunately.... DGO/IBD only counts mutual = funds ! This explains the difference between DGO and other data sources. = DGO doesn't count them all. Here's what they said (today): "When you say "count" we count the amount of shares of the floating = supply of stock that Mutual Funds own as registered with the NYSE and = NASDAQ exchanges."=20 regards, Gene ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 15, 2002 5:39 PM Subject: Re: [CANSLIM] UCBH Institutional ownership includes, in addition to mutual funds, pension = funds, insurance companies, some banks (buying for their own account), = venture capital funds, etc. There are also some individual investors = that usually get counted, a certain Saudi Arabian prince comes to mind, = who will buy $50 to $250 million worth of stock at a time, easily the = size of a mutual fund order. A bank is not always an "institutional investor" (unless buying for = its own account) as it is often used as custodian, or even agent, for = other institutional accounts as well as many retail accounts. My = employer is a bank, and also custodian for its securities clients. As = such, its collective holdings of some securities would easily be large = enough to count as "institutional" in size, yet they are not because the = end owner is a retail client of the bank, often making his or her own = investment decisions. WON does not count bank holdings for this reason, as it is difficult = to distinguish bank holdings as "proxy owner" from own holdings, same as = a broker dealer holding in street name for its clients. ----- Original Message -----=20 From: Gene Ricci=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 15, 2002 11:25 AM Subject: Re: [CANSLIM] UCBH Ann, my data source shows growth at 18, not too shabby for a bank... Charley... I'm awaiting a definitive answer from IBD on institutional = ownership. I've asked them what they count and what they don't count = because of the significant differences in the 'numbers' from different = data suppliers. My second question to them is 'why aren't banks and = pension funds, etc. counted in their numbers.=20 In the Q&A below, IBD switches between calling it institutional = ownership and mutual funds... if a bank isn't an institution why doesn't = IBD just call it funds?=20 What is a level of institutional ownership you consider when = buying a stock? If too many shares are already owned by institutional = investors, can that hurt a stock's chances of rising?=20 =20 Answer=20 It is hard to tell how much institutional ownership is too = much. Therefore, you should place less weight on this factor. Rather, = focus on the quality of ownership. You want to see at least a few of the = better performing mutual funds owning the stock you are considering = buying. In some cases, however, if too many shares are owned by = institutional investors, this could be bad. That's because it represents = large potential selling if anything goes wrong with the company or the = general market. =20 ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 15, 2002 8:58 AM Subject: Re: [CANSLIM] UCBH Ann: I will give you my thoughts to get you started.=20 Fundamentally, the stock looks sound. You say they lost a fraud suit = but for the time being the market has not reacted negatively. You didn't = say when, but if it wasn't yesterday, I wouldn't put much weight on it. = The market tends to respond very quickly to negative news.=20 You didn't state your investment goals, but in my opinion this is = not a growth stock. For one thing if institutions own 91% now, there = simply isn't enough stock available to new buyers to move the price = significantly. That does not mean they cannot enjoy good steady slow = growth. The funds own 31%; WON recommends staying below 25%.=20 The real positive for this stock is the Group RS rating, and the = Price RS.=20 The negative is the very weak market.=20 Charley=20 - ------=_NextPart_001_0278_01C244B4.3DFC1D50 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Mutual funds are pretty easy to define and = monitor=20 activity consistently, hence why DGO reports them. They are also = required to=20 file various reports of holdings, so easier to track. Institutionals = range from=20 semi-public pension funds to very private investors. So long as they = don't=20 exceed 5% holdings in a company, it can be very difficult, if not = impossible, to=20 track what they are doing.
 
----- Original Message -----=20
From: Gene Ricci =
To: canslim@lists.xmission.com=
Sent: Thursday, August 15, 2002 11:50 PM
Subject: [CANSLIM] Inst Ownership

Tom, I agree with you... = unfortunately....=20 DGO/IBD only counts mutual funds ! This explains the difference between = DGO and=20 other data sources. DGO doesn't count them all.
 
Here's what they said = (today):
 
"When you say "count" we count the amount of shares of the floating = supply=20 of stock that Mutual Funds own as registered with the NYSE and NASDAQ=20 exchanges."
 
regards,
Gene
----- Original Message -----
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com=
Sent: Thursday, August 15, 2002 = 5:39=20 PM
Subject: Re: [CANSLIM] = UCBH

Institutional ownership includes, in addition = to mutual=20 funds, pension funds, insurance companies, some banks (buying for = their own=20 account), venture capital funds, etc.  There are also some = individual=20 investors that usually get counted, a certain Saudi Arabian prince = comes to=20 mind, who will buy $50 to $250 million worth of stock at a time, = easily the=20 size of a mutual fund order.
 
A bank is not always an "institutional = investor" (unless=20 buying for its own account) as it is often used as custodian, or even = agent,=20 for other institutional accounts as well as many retail accounts. My = employer=20 is a bank, and also custodian for its securities clients. As such, its = collective holdings of some securities would easily be large enough to = count=20 as "institutional" in size, yet they are not because the end owner is = a retail=20 client of the bank, often making his or her own investment=20 decisions.
 
WON does not count bank holdings for this = reason, as it=20 is difficult to distinguish bank holdings as "proxy owner" from own = holdings,=20 same as a broker dealer holding in street name for its = clients.
 
----- Original Message -----=20
From: Gene Ricci =
To: canslim@lists.xmission.com=
Sent: Thursday, August 15, 2002 11:25 AM
Subject: Re: [CANSLIM] UCBH

Ann, my data source shows growth at = 18, not=20 too shabby for a bank...
 
Charley... I'm awaiting a definitive = answer=20 from IBD on institutional ownership. I've asked them what they count = and what=20 they don't count because of the significant differences in the = 'numbers' from=20 different data suppliers.  My second question to them is = 'why aren't=20 banks and pension funds, etc. counted in their numbers.
 
In the Q&A below, IBD switches = between=20 calling it institutional ownership and mutual funds... if a bank isn't = an=20 institution why doesn't IBD just call it funds?
 
 
What is a level of institutional ownership = you=20 consider when buying a stock? If too many shares are already = owned by=20 institutional investors, can that hurt a stock's chances of=20 rising?
3D""=20
  Answer
  It is hard to tell how much institutional = ownership=20 is too much. Therefore, you should place less weight on this = factor.=20 Rather, focus on the quality of ownership. You want to see at = least a=20 few of the better performing mutual funds owning the stock you = are=20 considering buying. In some cases, however, if too many shares = are owned=20 by institutional investors, this could be bad. That's because it = represents large potential selling if anything goes wrong with = the=20 company or the general = market.
 
----- Original Message -----
From:=20 Chazmoore@aol.com
Sent: Thursday, August 15, = 2002 8:58=20 AM
Subject: Re: [CANSLIM] = UCBH

Ann: I = will give you=20 my thoughts to get you started.
Fundamentally, the stock looks = sound.=20 You say they lost a fraud suit but for the time being the market has = not=20 reacted negatively. You didn't say when, but if it wasn't yesterday, = I=20 wouldn't put much weight on it. The market tends to respond very = quickly to=20 negative news.
You didn't state your investment goals, but in my = opinion=20 this is not a growth stock. For one thing if institutions own 91% = now, there=20 simply isn't enough stock available to new buyers to move the price=20 significantly. That does not mean they cannot enjoy good steady slow = growth.=20 The funds own 31%; WON recommends staying below 25%.
The real = positive=20 for this stock is the Group RS rating, and the Price RS.
The = negative is=20 the very weak market.

Charley=20
- ------=_NextPart_001_0278_01C244B4.3DFC1D50-- - ------=_NextPart_000_0277_01C244B4.3DFC1D50 Content-Type: image/gif; name="trnsp.gif" Content-Transfer-Encoding: base64 Content-Location: http://investdaily.custhelp.com/rnt/rnw/img/trnsp.gif R0lGODlhAQABAJH/AP///wAAAP///wAAACH/C0FET0JFOklSMS4wAt7tACH5BAEAAAIALAAAAAAB AAEAAAICVAEAOw== - ------=_NextPart_000_0277_01C244B4.3DFC1D50-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 15 Aug 2002 23:12:15 -0500 From: Gene Ricci Subject: [CANSLIM] The FASB Votes To Continue The Norm This is a multi-part message in MIME format. - ------=_NextPart_000_0495_01C244B1.320B80B0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hey, OK !!!=20 August 15, 2002 The FASB Votes To Continue The Norm =20 The FASB wants stock options to appear in the footnotes quarterly rather = than yearly. The FASB has voted no to expensing stock options and = states that companies choosing to expense stock options will be able to = choose from one of three transition methods.=20 FASB Statement: Companies can account for stock options using 3 = different methods, some companies will expense options while others will = not, and we will spend the next few years tweaking Statement 123 until = we widdle away the unfavorable methodologies (or the 2 transition = methods that companies bend the least).=20 - ------=_NextPart_000_0495_01C244B1.320B80B0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Hey, OK !!!

 

August 15, 2002
The FASB Votes To Continue The=20 = Norm


The = FASB=20 wants stock options to appear in the footnotes quarterly rather than=20 yearly.  The FASB has voted = no to=20 expensing stock options and states that companies choosing to = expense stock=20 options will be able to choose from one of three transition = methods.=20

FASB = Statement: Companies=20 can account for stock options using 3 different methods, some companies = will=20 expense options while others will not, and we will spend the next few = years=20 tweaking Statement 123 until we widdle away the unfavorable = methodologies (or=20 the 2 transition methods that companies bend the least).=20
- ------=_NextPart_000_0495_01C244B1.320B80B0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 16 Aug 2002 00:11:44 EDT From: Chazmoore@aol.com Subject: Re: [CANSLIM] Inst Ownership - --part1_17b.d088af6.2a8dd580_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Gentlemen, if I may guide this discussion back to it's beginning, I believe I was the one who pontificated that IBD/DGO recommends no more than 25% mutual fund ownership, because otherwise there would be inadequate institutional capacity left to buy the stock when it started to move. In my opinion they use mutual funds because they leave a paper trail, and the quality of investment skill can be measured. Other institutions, for example life insurance companies, are more difficult to evaluate. For most public companies, institutions own most of the outstanding float, maybe 80% to 90% (according to Yahoo). Since the bulk of the ownership cannot be evaluated as respects investment skill and success, WON hones in on that part that can be monitored; the mutual funds. He recommends mutual fund sponsorship, but for growth stocks, he likes to see the percentage of ownership at less than 25%, and the quality of mutual fund ownership, above average. But then, what do I know? Charley - --part1_17b.d088af6.2a8dd580_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Gentlemen, if I may guide this discussion back to it's beginning, I believe I was the one who pontificated that IBD/DGO recommends no more than 25% mutual fund ownership, because otherwise there would be inadequate institutional capacity left to buy the stock when it started to move. In my opinion they use mutual funds because they leave a paper trail, and the quality of investment skill can be measured. Other institutions, for example life insurance companies, are more difficult to evaluate.

For most public companies, institutions own most of the outstanding float, maybe 80% to 90% (according to Yahoo). Since the bulk of the ownership cannot be evaluated as respects investment skill and success, WON hones in on that part that can be monitored; the mutual funds. He recommends mutual fund sponsorship, but for growth stocks, he likes to see the percentage of ownership at less than 25%, and the quality of mutual fund ownership, above average.

But then, what do I know?

Charley - --part1_17b.d088af6.2a8dd580_boundary-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 15 Aug 2002 21:44:05 -0700 From: "NANCY POLCARO" Subject: Re: [CANSLIM] UCBH - ------=_NextPart_001_0000_01C244A4.E0A796C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Can you tell me how institutions own 91% and funds own 31 %?? =20 =20 - ----- Original Message ----- From: Chazmoore@aol.com Sent: Thursday, August 15, 2002 6:59 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] UCBH =20 Ann: I will give you my thoughts to get you started. =20 Fundamentally, the stock looks sound. You say they lost a fraud suit but = for the time being the market has not reacted negatively. You didn't say = when, but if it wasn't yesterday, I wouldn't put much weight on it. The m= arket tends to respond very quickly to negative news. =20 You didn't state your investment goals, but in my opinion this is not a g= rowth stock. For one thing if institutions own 91% now, there simply isn'= t enough stock available to new buyers to move the price significantly. T= hat does not mean they cannot enjoy good steady slow growth. The funds ow= n 31%; WON recommends staying below 25%. =20 The real positive for this stock is the Group RS rating, and the Price RS= . =20 The negative is the very weak market. =20 Charley =20 - ------=_NextPart_001_0000_01C244A4.E0A796C0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Can you tell m= e how institutions own 91% and funds own 31 %?? 
 
----- Original Message -----
From: Chazmoore@ao= l.com
Sent: Thursday, August= 15, 2002 6:59 AM
To: cansli= m@lists.xmission.com
Subject: Re: [CANSLIM] UCBH
 
= Ann: I will give you my thoughts to get you started.
F= undamentally, the stock looks sound. You say they lost a fraud suit but f= or the time being the market has not reacted negatively. You didn't say w= hen, but if it wasn't yesterday, I wouldn't put much weight on it. The ma= rket tends to respond very quickly to negative news.
You didn't state= your investment goals, but in my opinion this is not a growth stock. For= one thing if institutions own 91% now, there simply isn't enough stock a= vailable to new buyers to move the price significantly. That does not mea= n they cannot enjoy good steady slow growth. The funds own 31%; WON recom= mends staying below 25%.
The real positive for this stock is the Grou= p RS rating, and the Price RS.
The negative is the very weak market. =

Charley
- ------=_NextPart_001_0000_01C244A4.E0A796C0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 15 Aug 2002 23:43:38 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] Inst Ownership This is a multi-part message in MIME format. - ------=_NextPart_000_0045_01C244B5.945F0620 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Charley et al, Mark Boucher (The Hedge Fund Edge) recommends in his work that = institutional ownership (banks + mutual funds) runs 10-30%. WON seems to = take a more generalist view of the actual percentage and instead focuses = on both the quality of ownership and the fact that ownership is = increasing. As with Boucher, WON considers both mutual funds and banks = to be "institutional owners." A great place to check ownership is at: http://moneycentral.msn.com/investor/invsub/ownership/ownership.asp?Symbo= l=3DSBUX Then use either the IBD's Mutual Fund ratings or look up ratings at = www.morningstar.com to take a look at quality of ownership. - -Katherine From AskIBD (highlighting is mine): Question What percentage of a company's shares outstanding should be owned by = institutions in order for the stock to qualify as institutionally well = sponsored? =20 Answer It's not so much what percentage of a company's stock is owned by = institutions as the number of institutions that own it. You don't want = to see just one institution owning it. Any stock you consider purchasing = should be owned by at least a few mutual funds and preferably one or = more banks or other institutional investors. Also, look for stocks owned = by at least one top-rated mutual fund. The better funds research = companies extensively. So when they buy a stock, it serves as way to = cross-check how sound the company is. =20 Question Can too much institutional sponsorship be a bad thing? =20 Answer It depends on the company, their earnings and their products. In theory, = if a stock is heavily owned by institutions, it doesn't leave much for = other major investor's to buy and propel the stock higher. But if these = companies continue to grow, heavy ownership should not create a problem. =20 =20 Question What is a level of institutional ownership you consider when buying a = stock? If too many shares are already owned by institutional investors, = can that hurt a stock's chances of rising? =20 Answer It is hard to tell how much institutional ownership is too much. = Therefore, you should place less weight on this factor. Rather, focus on = the quality of ownership. You want to see at least a few of the better = performing mutual funds owning the stock you are considering buying. In = some cases, however, if too many shares are owned by institutional = investors, this could be bad. That's because it represents large = potential selling if anything goes wrong with the company or the general = market. =20 =20 =20 =20 ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 15, 2002 11:11 PM Subject: Re: [CANSLIM] Inst Ownership Gentlemen, if I may guide this discussion back to it's beginning, I = believe I was the one who pontificated that IBD/DGO recommends no more = than 25% mutual fund ownership, because otherwise there would be = inadequate institutional capacity left to buy the stock when it started = to move. In my opinion they use mutual funds because they leave a paper = trail, and the quality of investment skill can be measured. Other = institutions, for example life insurance companies, are more difficult = to evaluate.=20 For most public companies, institutions own most of the outstanding = float, maybe 80% to 90% (according to Yahoo). Since the bulk of the = ownership cannot be evaluated as respects investment skill and success, = WON hones in on that part that can be monitored; the mutual funds. He = recommends mutual fund sponsorship, but for growth stocks, he likes to = see the percentage of ownership at less than 25%, and the quality of = mutual fund ownership, above average.=20 But then, what do I know?=20 Charley=20 - ------=_NextPart_000_0045_01C244B5.945F0620 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Charley et al,
 
Mark Boucher (The Hedge Fund Edge) recommends in his work that = institutional ownership (banks + mutual funds) runs 10-30%. WON seems to = take a=20 more generalist view of the actual percentage and instead focuses on = both the=20 quality of ownership and the fact that ownership is=20 increasing. As with Boucher, WON considers both mutual funds = and banks=20 to be "institutional owners."
 
A great place to check ownership is at:
http://moneycentral.msn.com/investor/invsub/ownership/o= wnership.asp?Symbol=3DSBUX
Then use either the IBD's Mutual Fund ratings or look up ratings at = www.morningstar.com to take a = look at=20 quality of ownership.
 
-Katherine
 
From AskIBD (highlighting is mine):
 

Question

What percentage of a company's shares outstanding = should be=20 owned by institutions in order for the stock to qualify as = institutionally well=20 sponsored?

 

Answer

It's not so much what percentage of a company's = stock is=20 owned by institutions as the number of institutions that own it. You = don't want=20 to see just one institution owning it. Any stock you consider purchasing = should be owned by at least a few mutual funds = and=20 preferably one or more banks or other institutional = investors. Also,=20 look for stocks owned by at least one top-rated mutual fund. The better = funds=20 research companies extensively. So when they buy a stock, it serves as = way to=20 cross-check how sound the company = is.

 

Question

Can too much institutional sponsorship be a bad=20 thing?

 

Answer

It depends on the company, their earnings and their = products.=20 In theory, if a stock is heavily owned by institutions, it doesn't leave = much=20 for other major investor's to buy and propel the stock higher. But if these companies continue to grow, heavy = ownership=20 should not create a = problem.

 

 

Question

What is a level of institutional ownership you = consider when=20 buying a stock? If too many shares are already owned by institutional = investors,=20 can that hurt a stock's chances of = rising?

  

Answer

It is hard to tell how = much=20 institutional ownership is too much. Therefore, you should place less = weight on=20 this factor. Rather, focus on the quality of ownership. You want to see = at least=20 a few of the better performing mutual funds owning the stock you are = considering=20 buying. In some cases, however, if too many shares are owned = by=20 institutional investors, this could be bad. That's because it represents = large=20 potential selling if anything goes wrong with the company or the general = market.

 

 

 

 

 
 
 
 
 
----- Original Message -----
From:=20 Chazmoore@aol.com
To: canslim@lists.xmission.com=
Sent: Thursday, August 15, 2002 = 11:11=20 PM
Subject: Re: [CANSLIM] Inst=20 Ownership

Gentlemen, = if I may=20 guide this discussion back to it's beginning, I believe I was the one = who=20 pontificated that IBD/DGO recommends no more than 25% mutual fund = ownership,=20 because otherwise there would be inadequate institutional capacity = left to buy=20 the stock when it started to move. In my opinion they use mutual funds = because=20 they leave a paper trail, and the quality of investment skill can be = measured.=20 Other institutions, for example life insurance companies, are more = difficult=20 to evaluate.

For most public companies, institutions own most = of the=20 outstanding float, maybe 80% to 90% (according to Yahoo). Since the = bulk of=20 the ownership cannot be evaluated as respects investment skill and = success,=20 WON hones in on that part that can be monitored; the mutual funds. He=20 recommends mutual fund sponsorship, but for growth stocks, he likes to = see the=20 percentage of ownership at less than 25%, and the quality of mutual = fund=20 ownership, above average.

But then, what do I know?=20

Charley - ------=_NextPart_000_0045_01C244B5.945F0620-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #2808 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.