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BB&T Corporation Message Board

  • BBTFan BBTFan Dec 16, 2003 5:40 PM Flag

    Institutional ownership

    Mike, regarding the question on institutional ownership, there are two observations: first, being underowned makes BB&T more attractive to institutions who need more exposure to the financial sector. In my view this plus the fact BB&T is part of the S&P means solid future demand as explained below.

    Second, the reason BB&T's ownership by institutions is lower than peers is due to the 50+ acquisitions of companies with little or no institutional ownership which means individuals are the majority owners of the company. Historically, individuals have been a less volatile owner group. But as BB&T has grown and is now the 11th largest bank holding company, it is more attractive to money managers and any new S&P index fund.


    Fan

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    • I believe that institutions and mutual funds would hold significantly more shares if they actually found BBT attractive compared to peers, competitors, similar-sized regionals.
      You like it, you buy it.
      I'm not criticizing the operation. Just glad I'm not long while the stock share value is continually diluted. I also have ZERO pretense that the company M. O. is designed to benefit average retail shareholders.
      Over the last month, institutional trading, as reported to Thomson I-Watch is right at the 28% of all I-Watch-reported trades, same as the current institutional level of ownership..
      I do think this would be a stronger indicator if a larger percentage of trades were reported.
      And when we see 80% reported and 80% of those are institutions, you can bet they are accumulating. That support would cheer some of the suffering longs.

      http://iw.thomsonfn.com/iwatch/cgi-bin/iw_ticker?t=BBT&range=30&mgp=0&i=3&hdate=
      &x=7&y=6


      Is the current level of institutional ownership indicative of the historical level of institutional ownership?
      I don't know. Do You?
      Just curious.

      • 2 Replies to mikejaquish
      • Institutional ownership has gone from invisible 30+ years ago to the present level. The principal factors affecting the percentage:
        . banks BB&T buys have less inst. interest than BB&T,
        . sector rotation; money managers are like a school of fish or herd of cattle you see going in one direction, then suddenly go in another - you've seen 'em. When the financial sector has had a nice run like they have during the last 18 months, managers will lighten up and go chase another sector. I've watched them do it repeatedly over the years. The "lead steer" will make a move and the rest will follow to keep from being caught holding a temporarily "out of favor " sector. Has little to do with merit of companies in the sector. That's why I like total market & balanced index funds which take sector rotation risk out of the picture and reduce volatility - helps old investors sleep better at night while our money is working for us.

        All that being said, low BB&T inst. holdings vs. peers is a positive because s&p index funds have to maintain a balance of s&p firms and BB&T's size makes it increasingly important to be in institutioal portfolios.

        Over and out...

        Fan

      • Mike,

        Excellent post. I agree with you.

        BBT is large enough that institutions and mutual funds would know who they are and if they were a better investment or thought to give a better return than their peers then that is what the mutual funds would be buying.

        For some reason or reasons the big boys don't like BBT. Maybe they don't like management or maybe they know something we don't.

        For better investing,

        Jim

 
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