I've been keeping a close eye on what substantial shareholders have been doing recently.
Substantial shareholders are shareholders that hold 5% or more of a company's shares. These tend to be large investors, asset managers, and investment funds. These shareholders are obliged to update the market when they make any changes to their holdings.
As a result, I feel investors should look to use these notices to their advantage. After all, they show where the "smart money" is going.
Two notices that have caught my eye are summarised below:
AMA Group Ltd (ASX: AMA)
This smash repair company's shares have fallen heavily over the last couple of months following a disappointing trading update. One fund manager which has taken advantage of this pullback is CDAM UK. The London-based independent, privately owned investment management firm has snapped up ~4.9 million shares over the last few weeks. This has increased its holding in AMA to 43,978,961 shares, which equates to 6.01% of the company. CDAM prides itself on its simple investment philosophy – through rigorous stock selection its aims to build a concentrated portfolio of compelling returns for its clients. It invests in quality, growing businesses for the long term and traditional value stocks. AMA appears to tick a lot of boxes for CDAM.
Domino's Pizza Enterprises Ltd. (ASX: DMP)
A notice out of Commonwealth Bank of Australia (ASX: CBA) reveals that it has been buying the shares of this pizza chain operator. According to the release, Australia's largest bank has increased its holding by ~900,000 shares to a total of 6,089,525 shares. This means the bank has now lifted its interest to 7.06%. Judging by its investment, Commonwealth Bank appears confident in Domino's international expansion plans. Management intends to grow its store network significantly over the next decade. At the end of FY 2019 it had a network of 2,522 stores and is aiming to grow it to 5,050 in the future.
