“In general, the thirty largest shareholders in a large-cap technology company own between 30 and 50 percent of the stock,” Dan Ritter reports for Wall St. Cheat Sheet. “The data can be useful to market watchers interested in understanding the level of institutional interest in a sector and for certain stocks within that sector. That is, market watchers can follow the so-called ‘smart money,’ money invested by those with expert knowledge, as opposed to ‘dumb money.'”
“Google’s relatively high institutional ownership — at 84.2 percent as of the end of 2013 — suggests a high level of interest among professional investors and traders,” Ritter reports. “In theory, these investors wouldn’t hold the stock if they didn’t believe it would perform well in the future, making their ownership a vote of confidence in the company.”
“Apple’s top thirty largest owners own a combined 30 percent of the company,” Ritter reports. “This is down from a peak of 40 percent in 2009 and below the five-year average of 36 percent. Moreover, the portfolios of the top thirty holders of Apple stock are underweight Apple relative to Apple’s weight in the S&P 500. Morgan Stanley analyst Katy Huberty has an explanation for why this is the case. ‘We view low institutional ownership relative to other large cap mobile technology stocks as underestimating Apple’s ability to participate in new categories like wearables and services,’ she said in a research note.”
Read more in the full article here.