The theory is a stock loved by institution should be a long term steady company with very stable earnings. It is thought institutions have the ability to hire people to study companies and unless they are being fleeced, the people will make good decisions to keep their jobs for a long time. It is worth looking at institutional holding of companies.

Peter Ashton of Recognia examined his data bank and used the following criteria:

market capitalization of $ 5 billion or more.

companies that have between 50% to 80% institutional holding (or at least 20% held by the small investor or public float)

insiders are senior officers of companies and they are buying the stock of the company they work for – they see a good future, the minimum buying is 200,000 net shares

90 day average of at least 1 million shares traded

Company            Mkt Cap        5 of Inst.        Net Insider       Vol 90 Day        Dividend

(US $ Bil)       Ownership   Shares Bought    Average             Yield

Cisco Systems   157.9                 78.2%                392,213            21,588,639           3.3%

Phillips 66            41.5                 72.6                  1,124,620            2,832,920           3.2

Paychex                21.8                  72.9                     215,558             2,027,534           3.0

Abbott Labs         62.2                 74.3                      785,100            9,534,773           2.5

Intel                      175.9                  67.7                    250,192            21,271,607         2.8

Honeywell Intl     88.4                 77.9                    668,536               2,568,945         2.1

VF Corp                   23.5                  63.1                     290,356              2,444,941         2.6

Morgan Stanley     59.9                62.3                     269,754              12,923,500       2.5

Sabre Corp                7.7                 75.2                     484,412                2,787,679        1.9

21 Century Fox        46.1                51.8                    3,000,000             3,142,066        1.5

Leucadia National    6.8              75.9                        200,000              1,552,548        1.3

Linking to dividend paying stocks, while all the above pay dividend they offer good alternatives to the economy. It maybe the institutions have smart money, although their record can be similar to index funds – but for the index funds to work the institutions and public (smaller shareholders) need to trade. The institutions tend to have longer time periods and put more emphasis on the continual dividend, as opposed to whether the stock will be higher next quarter. The issue is not to much lower, as long as the dividend is paid. they can wait for the longer term capital appreciation. Many institutions have reasons why it can not buy or sell as opposed to the public which can have different reasons. Last week some personal stocks were sold to pay the renovators. We all have different reasons and different perspectives on how the markets will move.

There are more questions than answers, till the next time – to raising questions.