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Why Fidelity Management & Research Sold a Major Position in WMB in 3Q17

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Recent institution activity in WPZ

The number of institutional holders in Williams Companies (WMB) rose to 932 by the end of 3Q17, compared with 920 in 2Q17. However, the percentage of shares held by institutional investors rose to 87.0% from 86.6% during the same time frame.

Fidelity Management & Research Company, or FMR, unloaded a major position in Williams in the third quarter, selling 8.0 million shares of WMB. FMR was followed by Scopia Capital Management, which sold 4.76 million positions in the C corporation in 3Q17.

Capital Research Global Investors and BlackRock Institutional Trust Company were the biggest buyers, with 5.91 million and 2.82 million shares bought, respectively. Among the top institutional holders, 3.65 million positions were unloaded. This indicates a bearish sentiment toward WMB.

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Why institutional investors are bearish on WMB

Institutional investors’ bearishness toward WMB could be attributed to the following factors:

  • the decline in Williams Partners’ (WPZ) earnings in recent quarters due to contract restructurings and asset sales (though the partnership has reaffirmed its 2017 guidance)
  • the decline in throughput volumes in some regions due to production-related shut-ins
  • weakness in natural gas demand (though this might improve in the coming winter months)

Top holders

Fidelity Management & Research, Vanguard, BlackRock Institutional Trust, State Street Global Advisors (US), and Franklin Mutual Advisers are the top five institutional holders in WMB.

Fidelity Management & Research continues to be the top holder, though it unloaded a major position in 3Q17, currently holding ~7.9% in WMB.

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