I’ve been keeping a close eye on what substantial shareholders have been doing recently.
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:
Altium Limited (ASX: ALU)
According to a notice of initial substantial holder, Pinnacle Investment Management has just become a substantial shareholder of this electronic design software company. The notice reveals that Pinnacle has been adding to its position this month, bringing its total holding to 6,931,951 shares. This equates to a 5.29% stake in Altium. The fund manager was buying shares in or around the level Altium’s shares are trading at now. Which would appear to indicate that it believes they offer plenty of upside from here. I certainly believe this is the case and feel Altium is a top buy and hold option thanks to its exposure to the Internet of Things market.
Atomos Ltd (ASX: AMS)
According to a change of interests of substantial holder notice, Ellerston Capital has taken advantage of a pullback in this video hardware technology company’s share price to top up its position. The notice reveals that Ellerston has bought almost 6 million shares over the last couple of months. This lifted its holding to a total of 22,311,112 shares, which equates to 10.58% of its issued stock. The Atomos share price is down 72% from its 52-week high and at a level which this fund manager appears to believe is attractive. Its shares were hit hard after the pandemic shut down its core pro video market. But with economies slowly reopening around the world, this fund manager may be expecting a rebound in sales and its share price in the near future.
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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 Atomos Ltd. The Motley Fool Australia owns shares of Altium. 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.