I’ve been keeping a close eye on what substantial shareholders have been doing recently. Especially following the market crash.
Substantial shareholders are those 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:
Crown Resorts Ltd (ASX: CWN)
A change of interests of substantial holder notice reveals that Perpetual Limited (ASX: PPT) has been topping up its position in this casino and resorts operator. According to the notice, Perpetual has picked up a further ~7.2 million shares recently. This lifts its stake in Crown to a sizeable 63.2 million shares, which is the equivalent of 9.33% of its shares outstanding.
It appears as though the investment company believes the selling of Crown’s shares during the coronavirus pandemic has created a buying opportunity for investors. Even after recovering strongly over the last few weeks, the Crown share price is down by approximately 40% from its 52-week high.
Tyro Payments Ltd (ASX: TYR)
FIL Limited, also known as Fidelity International, has been buying this payments company’s shares following their sharp decline. According to a change of interests of substantial holder notice, Fidelity has increased its holding in Tyro by 9.8 million shares to a total of ~41.1 million shares. This equates to a stake of 8.27%.
Concerns over the impact that the closure of retailers and restaurants will have on its business have been behind its share price decline. The Tyro share price is down 47% from its 52-week high.
These concerns are not unwarranted. This morning Tyro released an update which revealed that transactions are down 42% month to date compared to the prior corresponding period. However, judging by its purchases, Fidelity appears to believe that Tyro will bounce back strongly once social distancing initiatives are eased.
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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 Tyro Payments. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. 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.