Most stocks are owned by institutions and the majority of the trading volume on exchanges are from large institutional traders. Although large and mid-cap stocks have many individual investors, only a few possess millions of shares or hold a majority in a company. These institutions are often pension funds, commercial banks and investment funds. Institutional ownership means that these large institutions hold ownership stakes in a company.
Oftentimes, these institutional owners exert substantial influence on management. Individual minority investors also look to institutional owners and what they are doing, as institutional owners are often more knowledgeable about the companies they invest in. Therefore, these investors can exert substantial impact on the stock price.
The number of institutional investors in a particular company are neither a good nor bad sign. However, more institutional investors will offer more stability as diffused ownership minimizes the impact of one firm selling off their stocks.
Torc Oil & Gas Ltd (TOG-T)
A well-run oil producer that has a good management team. They are generating positive cash flows. They usually underpromise and over-deliver. The dividend is considered safe. Their yield is 6 per cent.
A huge laggard this year. It is trailing other names at 20-30%. They have not yet reinstated dividends. They should reinstate it early next year. At current levels, the stock trades at 14% free cashflow yield. At $50-$60 oil, it trades at 30%-60% free cashflow yield for dividends and buy-backs. (Analysts’ price target is $2.46)
Birchcliff Energy Ltd. (BIR-T)
A Canadian natural gas company. It has done well and is generating cash flow. The balance sheet is in good shape and they are paying off some debt. They also raised dividends last quarter.
Smaller Canadian energy stocks will benefit from gas demand when people travel in the summer. BIR is more focussed on natural gas, which will enjoy a rally following he Texas freeze recently. However, swings in energy prices in Canada will remain and making money will remain difficult. He prefers the safer CNQ, Suncor or Tourmaline.…
Tourmaline Oil Corp (TOU-T)
A natural gas producer. The company is adding more liquids and are looking to have more cash flow. Signs point to a dividend raise or a stock buyback.
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sector rally has paused though TOU is still up 39% this year. The stock remains attractive on most metrics and good growth is expected this year. Next year should see slower growth. Cash flow is good and dividend was raised a couple weeks ago. Unlock…
Atlantic Power Corp. (ATP-T)
A power generation and distribution company. The company has assets in the U.S. and Canada. As consumers rely increasingly on electricity, the business has a good niche. A lowering of interest rates will help this company’s stock price rise.
They generate electivity and sell it. As we move in this direction this company will have a foothold and niche. It is a capital intensive business and interest rates rising will be a problem.
🛢 Basic Materials
Turquoise Hill Resources (TRQ-T)
A mineral exploration and development company. They have one of the best copper deposits in the world. RioTinto owns about 51 per cent of the company. This company is sensitive to copper prices.
It's in production. The question is how much more capital does it require. It is a good deposit and they have a good partner, but Mongolia is and will be an issue. It is highly levered to copper prices and you still have the geopolitical risk. It is a big asset in terms of copper.
Morguard Corporation (MRC-T)
A well-run real estate company that holds a diverse portfolio of properties across North America. They buyback stocks with their free cash flow. There is not a lot of volume but is at a good price right now.
Some businesses are not properly structures for COVID-19. Eventually the virus goes away and business goes back to normal and this one will be an undervalued company. You just need to make sure these businesses can survive.
Bank of America (BAC-N)
They are well positioned to increase dividends or buy back stocks. It is quite cheap although it’s gone sideways for the last year. They are reducing cost and changing their capital ratios.
The yield curve is steepening which will help revenues. They have held reserves very well, and these are coming off and going to the bottom line now. The Fed after June will allow banks for buyback shares and increase their dividends, too. Also, BAC has lowered their costs and using technology more efficiently. The U.S.…
Wells Fargo (WFC-N)
It’s selling at a discount to other U.S. banks. They were hit with a sanction for front running customers and other corporate malfeasance. The Fed is now monitoring them so tread carefully.
US banks are great, one of the top performing industries in the S&P. WFC has a great valuation, trading around book value, and it didn't do that great in 2020.
Their software as a service with subscriptions is doing very well. The cloud department is growing. The margins are high and it is a more defensive name in the tech sector. They are turning the company into a utility in some sense.
Displaced Oracle in the cloud as the database of choice. It's about selling cloud services, like a utility. Margins are much higher on cloud than selling software. Over time, margins and free cashflow will go up. Not concerned about the valuation, because of growing business and margins.
A company that will benefit from 5G. The software earnings are also doing well. There are some concerns over the trade war as their hardware might be subject to tariffs.
Pays a decent dividend and trades around 19x PE. It will benefit when 5G comes along. There's a lot of money for broadband growth coming as we transition to 5G networks. Not a pricey stock, but he sees more growth in software stocks. CSCO will do better though given 5G.
They’re in a mature market and the gross margins are not expanding. The stock showed some weakness with the new China tariffs.
They report Thursday. It's now led by a new CEO who's doing a terrific job inspiring people inside and outside the company. If the stock falls, buy. The CEO can turn the company around on a dime, but will turn it.
A leader in the market and has more cash on the balance sheet than some countries. There are concerns over consumer privacy and slowing iPhone sales but the company is not going away.
General Electric (GE-N)
The beleaguered company had its first quarter of beating expectations. The management is doing its best to survive but the company has been evolving so rapidly that it is hard to say how it will go. This has become more and more a speculative stock.
(A Top Pick Oct 20/20, Up 82.7%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with GE is progressing well. We recommend trailing up the stop (from $8.00) to $11.50. This would all but guarantee a minimum return on investment of 46%, including the previous recommendation to cover 50% of the position.
Pfizer Inc (PFE-N)
The largest pharmaceutical company. It is holding and is more of a protective play. They have successfully acquired some companies and have promising drugs. There are only a few products coming off patents so it is a pretty safe pick.
Their vaccine has been a boon to their revenues, which jumped 30% in a one year, but this is likely a round trip. Also, margins on this vaccine are fairly low. The vaccine offers some benefit to PFE, but it's limited. Look elsewhere.
Comcast Corp (CMCSA-Q)
They have a U.S. market penetration of 45 per cent. They have low volatility and pays a good dividend. The largest broadcasting company and are somewhat protected from Netflix streaming as they provide the internet network to consumers.
Coca-Cola Company (KO-N)
A defensive play. A consumer staple name that is diversifying away from their main product and getting more into sports drinks. They also recently purchased a coffee company with a lot of growth.
During lockdown, at-home consumption benefited, but away-from-home dropped. This should recover with reopening. Overhang is a tax dispute with the IRS. If the case goes against them, it will be a significant one-time hit as well as higher tax rate going forward. She owns MDLZ instead.
A major telecommunications company in the U.S. They are selling off assets to pay off debt. A company in a tough environment that made big bets on acquisitions. Their dividend is high but the stock has been range bound.
Verizon Communications (VZ-N)
A defensive play that will benefit from 5G. There are concerns about their debt and the sector is very competitive. They are moving up quarterly and pay a good dividend.
They report Wednesday. Will this stock ever move up? It's stuck and feels more like a bond, than stock. He expects nothing new. He prefers T-Mobil.