Shares-Owned-by-Institutions

Just as the name sounds, this section is going to be about shares owned by institutions. What is the significance of this you may ask, it is important because if many different large institutions own the stock, they could all be expecting the stock to do something in the future. Of course if you are looking at companies such as Apple or Amazon, institutions are going to have this stock because they more than likely use it in the funds to ensure it follows their intended benchmark.

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Reviewed by Rifka Kats

Another aspect of shares owned by institutions is you want to see how much of the stock they own and if they are voicing their opinions about the equity. An example being if company A owns shares of XYZ, and they put out a favorable opinion on XYZ, you want to ensure there is not a conflict of interest there. Also, but sure to watch the news because large investing institutions may announce where they are liquidating large positions of a given equity. This could cause a large swing in the stock price as people follow what they large investing banks are doing.

If you are looking to put this on your charts, be sure to see if your trading or investing platform has this capability. Some have the ability to plot fundamental data, which allows you to view the chart from a fundamental aspect, which others have purely technical analysis tools. Share owned by institutions is important, but to go along with that, you want to see how the insiders are handling their stock as well. If you see executives selling shares or exercising their options, this could be an indication they are not fully vested in what they company is doing for the future. On the other side, if they are purchasing more equity in the company, they could be backing the changes that may or may not occur.

As with any data point, it is important to understand how it affects the equity you are looking to invest and then study it. There are plenty of tools out there on the Internet and on this website to help guide you through the process. Be sure to test you theories out before implementing them, ensuring it is a good fit for your investing style. If you still have questions, reach out to an investing professional and they will help to guide you in the right direction.

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