I’ve been keeping a close eye on what substantial shareholders have been doing recently. Especially following the market selloff.
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:
Corporate Travel Management Ltd (ASX: CTD)
Invesco Australia has been topping up its position in this corporate travel specialist after its sharp share price decline this year. A notice of change of interests of substantial holder reveals that the investment management company picked up 1,163,413 shares on March 9. Invesco Australia paid approximately $12.7 million for the shares, which lifted its holding to 8.55%. Earlier this week Corporate Travel Management’s shares sank to a multi-year low of $9.41 amid concerns over the impact of the coronavirus outbreak on its performance.
Steadfast Group Ltd (ASX: SDF)
This general insurance broker’s shares have fallen very heavily over the last few weeks, leaving them trading close to a 52-week low. A change of interests of substantial holder notice reveals that Challenger Ltd (ASX: CGF) has taken advantage of this share price weakness to increase its stake in the company. It has picked up 1.14 million shares recently, lifting its total holding in Steadfast to 53,103,980 million shares. This equates to a total stake of 6.15%. Challenger appears to have been impressed with Steadfast’s performance in the first half. It reported a 29.6% increase in underlying revenue to $414.4 million and a 39.1% lift in underlying net profit after tax of $53.2 million.