According to the latest SEC Filings, institutions owning shares of Advantage Oil & Gas Ltd. (NYSE:AAV) of the Basic Materials sector have increased their transactions by 3.54% over the past 3 months. Institutions now own 58.00% of the company.
Organizations that control a large sum of money, such as mutual funds, pension funds or insurance companies, who buy securities are referred to as “institutional investors”. In contrast to retail, or individual, investors, institutional investors trade in gigantic blocks, defined as 10,000 or more shares in a single transaction. These large trades can significantly affect the price of a commodity.
PROS AND CONS
The merits of institutional ownership in a stock is a matter of debate. In Peter Lynch’s best-selling book, “One Up on Wall Street”, he lists thirteen characteristics of “the perfect stock.” Referring to institutional ownership, he says this: “Institutions don’t own it and the analysts don’t follow it”. He favors commodities that the big investment groups ignore because these stocks have better chance of being undervalued.
However, founder of Investor’s Business Daily, William O’Neil, says that institutional investors are the largest source of demand for stocks, which is needed to move the price of a share up. He argues that if a stock has no institutional owners, then it is because they have already passed on it. He describes institutional ownership as a characteristic to look for in stocks worth pursuing in his book “How to Make Money in Stocks”.
The both agree that institutional ownership can be dangerous because they move in and out of the market in very large blocks, so if something goes wrong, the stock’s value can tank if they sell.
Advantage Oil & Gas Ltd. (NYSE:AAV) stands 6.82% away from its 50-day simple moving average and also 26.89% away from the 200-day average. Recently, the commodity stands -1.85% away from the 52-week high and 78.42% from the 52-week low. The RSI (Relative Strength Index), an indicator that shows price strength by comparing upward and downward close-to-close movements is 58.71.
The consensus analysts recommendation at this point stands at 2.10 for Advantage Oil & Gas Ltd. (NYSE:AAV). This is based on a 1-5 scale where 1 indicates a Strong Buy and 5 a Strong Sell. Further, analysts have a 12 month target price of $7.81 on company shares. This is according to the analysts polled by Thomson Reuters which have recently published research reports on the firm.
Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. This is not a recommendation to buy or sell Advantage Oil & Gas Ltd. (NYSE:AAV).
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