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:
Mineral Resources Limited (ASX: MIN)
According to a notice of initial substantial holder, Challenger Ltd (ASX: CGF) has become a substantial holder of this mining services and mining company. The notice reveals that the annuities company now owns 9,652,671 Mineral Resources shares. This is the equivalent of a 5.12% stake.
Mineral Resources' shares have been on fire this year and hit a 52-week high earlier today. But judging by its purchases, Challenger appears confident they can still go higher from here. In other news, earlier this week it ceased being a substantial holder of EML Payments Ltd (ASX: EML) after selling a large number of shares on-market.
Superloop Ltd (ASX: SLC)
A notice of change of interests of substantial holder reveals that Perennial Value Management has taken advantage of a pullback in this telco company's shares to top up its position. According to the notice, Perennial has lifted its holding by just under 6 million shares to a total of 33,903,841. This has increased its stake in Superloop to 9.27%.
Superloop's shares were sold off on Tuesday after it reported a 9.1% decline in half year EBITDA to $4.1 million and downgraded its full year guidance. Superloop was targeting FY 2020 EBITDA of $14 million to $16 million, but this has now been revised to $12 million to $15 million. Management blamed the downgrade on the short term implications of international travel restrictions and the resulting business impact from the coronavirus outbreak.
