Institutional Interest Growing

[peter]

Institutional Interest of shares in Mannkind is growing
09-12-2016,

In the SEC’s latest filings, institutions owning shares of MannKind Corporation (NASDAQ:MNKD) have increased their transactions by 7.17%. Institutions now own 20.30% of the company.

that's good to know,and this will be the start of more to come...

[matt]

You have to be careful when looking at aggregate "institutional" ownership because of the reporting requirements of the Investment Act of 1940. Two caveats:

1. The numbers are not close to real time. They are a snap shot of the holdings on the last day of the quarter, and are reported 45 days after quarter end, so the most recent numbers reflect what holdings looked like on September 30. A lot has happened since September, but you won't see subsequent changes until February 15 when the year end numbers are reported. A lot can happen in four and a half months so be careful with any number that reports so far in the past.

2. Institutions are allowed to aggregate all funds under common control. If you, as an individual shareholder, have a brokerage account at Fidelity then the purchases of MNKD you decided to make in your personal account show up as "institutional ownership" since, legally, Fidelity owns the shares and you have a claim against their value with Fidelity. Ditto with index funds; if MNKD's percentage share of the index fund value increases then the fund will buy more, and if the percentage value goes down the fund will sell. All index trading is driven by computer algorithms with no human involvement because they fund has to track the index. Note too that MNKD's percentage share of a value in a particular index is dependent on MNKD's stock price, but it also depends on every other stock in the index and the overall market demand for particular sectors. An index fund could increase or decrease MNKD holdings simply to match changes in the index value caused by OTHER companies.

That is quite different from a portfolio investment by a knowledgeable strategic healthcare funds where the fund managers are paid to make investment choices. About the only way to tell whether institutional ownership changes mean anything significant, is to learn which funds are actively managed and specialize in healthcare stocks and then look at the data for those specific funds to see if the numbers are going up or going down. The numbers from the big data aggregators contain so many pieces that it becomes impossible to know what is retail investment, algorithm driven investment, and true specialty fund management.