It's the approach of a hyena, but an institution in trouble is the best chance small investors have of getting Cochlear shares at a good discount. Institutions really have a lock on this company, owning about 75 per cent, and a sell down by one institution may easily be absorbed by another. However, the market does experience bear runs, as witnessed in March, and institutions are as subject to fad and fancy as other investors. One might be lured to another higher growth story, but in doing so create an opportunity for the Cochlear bargain hunter. There is one final investment angle relevant for small investors seeking Cochlear stock.
Small investors have a wider investment scope than large or institutional investors.
Small investors can, for example with Cochlear, bet on the demand dynamics of institutions driving the stock price up even higher. Institutions will generally have a bias towards investments in the asset sub-class that contains the highly liquid stock of companies with large capitalisations. They are willing to pay full price for a stock if there are few other quality alternatives in the class. And to top it off, the more that superannuation funds flow into the sector the more demand increases for such assets.