I = Institutional Sponsorship

[ajaskey]

Placeholder for summary of "I". Members are free to post discussion comments/questions related to this topic in this thread. Posts in other topic areas will be moved to the correct topic thread.

Andy

 

[Brandonf]

I have found the I to be one of the least important factors in CANSLIM. In fact having too much I[/] can, I think be a negative in a stock more so than a positive. The institutions seem to all kind of do the same thing at the same time, kind of a dog pile effect and this leads to increased risk at certain times. I also find that if you find a stock which fits the criteria it will eventually get institutional sponsorship and probably see the Price to Earnings ratio expand as the price rises more than earnings alone would account for.

Brandon

 

[ajaskey]

I have found the I to be one of the least important factors in CANSLIM.

Brandon

That depends on how you use it. If you keep track of when they bought and how much float remains, then it is really as close to a sure thing as you will find.

Assume there is a stock with 4M float. If you see institututions have picked up 2M of the float within a long base, then there is very little supply to absorb when it breaks out of that base. If the institutions are your quality funds then they didn't buy in the base for a 5-10% pop out of the base. Stocks like this usually run far and fast.

 

[ajaskey]

Insider Watch

Great free site to watch your stock list for insider (and significant institutions) buys/sells. Register and you can add a list to your profile that allow you to monitor whichever stocks you choose.

http://www.secform4.com/insider/buys.php

 

[stoxtrader]

http://www.secform4.com/insider/buys.php

Insider Cow is another resource along those lines...

http://www.insidercow.com/

 

[efficiency]

Actually, it's one of the more important aspects. That's WHO you'll ultimately being selling to in theory. And.......they're slow moving prey with herding tendencies.

Yes, too much is indeed a negative. Beyond 70% institutional ownership is saturation. Below 30% implies room to move.