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Fire Your Stock Analyst!: Analyzing Stocks on Your Own by Harry Domash

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Step 10: Ownership

Total insider holdings is the only significant ownership factor for value investors.

Institutional ownership data is not a factor in the analysis because of its lack of timeliness. Institutional ownership will generally be less than 50 percent of outstanding shares if the company has been in the market’s doghouse for six months or longer. However, at best, the institutional ownership data will only confirm what you’ve already determined.

Insider ownership levels exceeding 55 percent of shares outstanding signals potential problems. You can compute insider ownership by subtracting the float from the total shares outstanding. Both figures are shown on Reuters Profile & Snapshot report. ATI’s insider ownership totaled only 2 ...

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