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:
Adairs Ltd (ASX: ADH)
According to a change of interests of substantial holder notice, Pendal Group Ltd (ASX: PDL) has been adding to its position in this homewares retail company. The fund manager picked up approximately 2.15 million shares at the end of last month. This increased its stake to a total of 13,231,111 shares, which is the equivalent of a 7.83% holding. With its shares down 40% from their highs, judging by its sizeable purchase, Pendal appears to believe they are in the bargain bin.
Incidentally, this morning Adairs released an update which revealed that its online sales have been going through the roof during the lockdowns. During the store closure period, Adairs' online sales have exceeded expectations and are up 221% for the period. Later this week the company will progressively reopen its stores again
WiseTech Global Ltd (ASX: WTC)
A change of interests of substantial holder notice reveals that Hyperion Asset Management has been topping up its position in this logistics solutions company once again. According to the notice, Hyperion has picked up a total of ~3.75 million shares for approximately $63.74 million. This increased the fund manager's stake in WiseTech Global from 6.12% to 7.29%.
With the company's shares down over 50% from their 52-week high, it appears as though the fund manager believes they are still great value. Especially after it recently reaffirmed its guidance for FY 2020.
