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.
