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:
ImpediMed Limited (ASX: IPD)
A notice reveals that Australian Ethical Investment Limited (ASX: AEF) has become a substantial holder of this medical software technology company this week. The ethical investment company has increased its holding to 27,759,024 shares, which gives it a 5.43% stake. ImpediMed is a medical software technology company that non-invasively measures, monitors, and manages fluid status and tissue composition using bioimpedance spectroscopy. Earlier this week it released an update and revealed total revenue of $1.5 million for the second quarter. This was a 63% increase on the prior corresponding period and puts it on track to achieve its guidance range of $7 million to $8.5 million for the full year. Its SOZO device was the main driver of growth during the quarter.
Reject Shop Ltd (ASX: TRS)
A change of interests of substantial holder notice reveals that Grahger Retail Securities has continued to add to its position in this discount retailer. Over the last few weeks Grahger Retail Securities has been on a buying spree. This continued between January 17 and January 23, with the investment company adding 333,358 shares for a total of ~$1.35 million. These purchases have lifted its stake up to 10.426%. This rampant buying has helped drive the Reject Shop share price up by 112% since the beginning of December. Once again, if these latest purchases are anything to go by, Grahger Retail Securities appears to believe its shares can still go higher from here.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.