I’ve been keeping a close eye on what substantial shareholders have been doing recently. Especially following the market crash.
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 so-called smart money is going.
Two notices that have caught my eye are summarised below:
Lovisa Holdings Ltd (ASX: LOV)
According to a change of interests of substantial holder notice, Challenger Ltd (ASX: CGF) has taken advantage of a collapse in this jewellery retailer’s share price to top up its holding. The notice reveals that the annuities company picked up 1.2 million shares between March 2 and March 27. This increased its holding in Lovisa to a total of 7.745 million shares, which equates to a 7.21% interest. This looks to have been good timing by the fund manager. Lovisa’s shares have now more than doubled in value since sinking to a 52-week low of $2.34 last month. Investors responded positively to Lovisa’s plan to shut the majority of its stores because of the coronavirus outbreak.
WiseTech Global Ltd (ASX: WTC)
A change of interests of substantial holder notice reveals that Hyperion Asset Management has been buying more of this logistics solutions company’s shares over the last few weeks. According to the note, between February 28 and March 27 Hyperion picked up a total of 3.33 million shares for approximately $51 million. This increased the fund manager’s stake in WiseTech Global from 5.07% to 6.12%. With the company’s shares down 59% from their 52-week high, it appears as though this fund manager believes they are in the bargain bin right now.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of WiseTech Global. 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.