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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: G3 who wrote (60399)	9/16/1999 8:02:00 PM
From: G3	Respond to of 90042

I found this mentioned on the MapQuest (MQST) thread on YAHOO. I'm in MQST at 12 5/8. It's the 7th most visited website and I'm surprised AOL hasn't snatched it up yet. At $416M market cap, it's a cheap buy for one of the giants. Increased institutional ownership is "usually" good. A good bit of MQST's business is non-internet related. They're at www.mapquest.com . moneycentral.msn.com A good explanation of institutional ownership! (cut-n-pasted from the above article at moneycentral.msn.com) Financial institutions like banks, insurance companies, hedge funds and pension trusts own the vast majority of shares of stocks around the world. As an example, the largest public mutual fund that only owns shares of companies in the Standard & Poor?s 500 Index -- the Vanguard Index Trust 500 Portfolio -- has less than $50 billion in assets. In contrast, the world?s financial institutions are estimated to hold more than $600 billion worth of S&P 500 stocks. These financial institutions have the best investment research in the world available to them, and regularly visit the management team of companies in which they buy shares. Consequently, they are considered to be the "smart money" that everyone talks about. When these institutions decide to invest in a company, the move is generally considered to put a stamp of approval on the firm?s prospects. Every time that institutional ownership increases, moreover, the stamp of approval becomes firmer. Increasing institutional ownership has the further effect of stabilizing the price of a stock, and creating a "floor" for its value. That?s because an institution that buys 5% of a company?s outstanding stock takes those shares out of circulation for some time, diminishing the number available for others to buy. Investors who want to buy the stock subsequently must fight over a diminished supply -- a situation that tends to make the stock dearer. By itself, however, an increase in institutional ownership is not a reason to buy or hold a stock. It is just a clue that the stock is in demand by some pretty smart folks. Their ownership can be a two-edged sword, since a stampede out of a stock by institutions can cause millions of shares of a stock to flood the market, diminishing their value. To determine which large institutions hold this stock, check Form 13-D and Form 13-G SEC filings in Stock Research. Any owner of more than 5% of a stock must tell the government -- and, by extension, you -- of any changes in their holdings within 10 days. Note that institutional ownership is less of a factor for small- and medium-cap stocks. Since large institutions tend to take large positions, they tend to invest in large companies.