In the SEC filing, it was revealed that Camtek Ltd. (NASDAQ:$CAMT) is currently 52.36% owned by institutions, an increase of 4.90%.
Institutions can include pension funds, insurance companies, mutual funds, and any other organization that controls large sums of money. Unlike individual investors, institutions trade in large blocks of 10,000 or more shares per transaction. Of course, since shares are moved in such high volumes, trades can affect the price of a share significantly.
Large amounts of institutional ownership is a good sign for investors. Institutes often make purchases based on the research of teams of experts. This can also mean that institutions are reluctant to sell, due to the high research investment.
Institutions also have the ability to push stocks using media like television, magazines, presentations, newspapers, or the internet, increasing the value of their shares.
The Good and The Bad
So does that mean that institutional ownership is a good thing? Not exactly. It is a hotly debated topic that often divides analysts. In “One Up on Wall Street”, Peter Lynch, in regard to the idea of a perfect stock, says, “Institutions don’t own it and the analysts don’t follow it”. Many, like Lynch, see the potential for undervaluing institute-controlled stocks.
Not all agree with that, however. William O’Neil, the founder of Investor’s Business Daily, says that institutions create the largest source of stock demand, which is vital to increasing share price. He even argues that if a stock has no institutional ownership, it’s not worth the time.
Despite their differences, both sides agree that institutional ownership can be dangerous if institutes control large blocks, which could cause a price to plummet if they sell it all off at once.
A Look at the Technicals
Camtek has exceeded its moving averages. Moving averages are useful tools for charting peaks and valleys and identifying upswings and downswings. They are often kept for a given trailing period of time and are sometimes expressed as a percentage from the average itself.
Currently, Camtek stands 16.65% away from its 50-day moving average and 26.82% away from its 200-day moving average.
We can also take a look at the stock’s 52-week highs and lows. Camtek currently stands -28.64% away from its 52-week high and 108.82% away from its 52-week low. The Relative Strength Index is another good measure that runs from 0 to 100 and indicates whether a stock is overbought or oversold, with the former indicated from 70-100 and the latter indicated from 0-30. The RSI for Camtek currently sits at 68.90.
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