By Relmor Demitrius
With Sirius XM Radio (NASDAQ:SIRI) set to report their 2nd quarter financial results in less than one week now, investors are going over numbers, looking at data, and trying to determine how much upside this stock may have. Well, apparently the majority of its institutional holders think there is more upside to be gained here. According to the NASDAQ.com website (home to where Sirius XM trades) their institutional holding percentage is now 22.2%, which is up by 2% from just a month ago.
As the stock broke out of penny stock territory and was added to the Russell family of indexes earlier this year, investors have been looking for signs from “smart money” to see if this bullish move is just starting or it is time to sell out and book gains. It is difficult to evaluate a company like Sirius XM and there are many opinions out there as to its true value. So anytime you see institutions adding shares of your company, it is not a bad thing. These shares usually are held longer and do not see as much float action as retail shares may. Typically institutions take into consideration what stocks they buy with use of careful planning, painstaking fundamental analysis of the company, and timing proper entry positions. This percentage isn’t even taking into account all the shares now off the board held by the Russell index and its shadow funds. Those shares would not have been reported into this percentage as of yet. It is a lagging count of ownership levels, but still can show trends and be useful in determining institutional sentiment over time.
People debate how much institutional ownership is good for a stock. Some people prefer stocks with high retail ownership, as they usually offer more volatility. What percentage do you think is ideal for your trading/investment strategies in Sirius XM?
Thanks Relmor,
Great question? Let’s take it a step further. What is a preferred inst. % for traders, vs. swing traders, vs. longs. I’ll bet they’re all different. It seems to me that the more inst. ownership the more stability in a company which would be preferred by longs, but what is that comfortable %?
I would be happy with 50% as a nice volatility/stability compromise.
I am not sure what an ideal percYntage is, but I am disappointed that it currently is only 22%; esp., after the Russel Re-balance. yes, it has gone up in recently and there are more institutions, but it was at 24.99% last November, so I just don ‘t get it. Had fully expected to see a significant increase to something like 30% by now. In fact, I was viewing the RR as something similar to a stock buy back and thus improving the supply/demand situation…but, doesn’t appear to have happened? Anyway, at least it is going in the right direction, but as with the PPS… not enough…
Thanks for your input boomer. I may have missed the sudden increase and drop again in Novemeber, but im pretty sure that its never been over 21%. What is your source so I can use it too if its more accurate?