I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.
Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:
Baby Bunting Group Ltd (ASX: BBN)
A notice of initial substantial holder reveals that United Super has been adding to its position over the last few months. Between 6 April and 4 August, the fund manager picked up 1,557,545 Baby Bunting shares. This brought its total holding to 6,446,678 shares, which equates to a 5.05% interest in the baby products retailer’s shares.
While its purchases in April were at a significant discount to today’s share price, it did pick up 200,000 shares for an average of $3.60 per share last week. This is the same level Baby Bunting’s shares are trading at today, which appears to be an indication that this fund manager still sees a lot of value in them. One broker that might agree is Citi. Last month it put an overweight rating and $3.90 price target on its shares.
EML Payments Ltd (ASX: EML)
Another notice of initial substantial holder reveals that Commonwealth Bank of Australia (ASX: CBA) has been buying this payments company’s shares. According to the notice, the banking giant and its subsidiaries have been buying EML shares consistently since the beginning of April. As a result, the bank now owns 18,008,708 shares, which is the equivalent of a 5% stake in the company.
It appears as though Commonwealth Bank has taken advantage of a collapse in the EML Payments share price during the pandemic. Its shares are down by 46% from their 52-week high after the coronavirus hit its business hard. However, management remains confident that its growth will resume post-pandemic. Judging by its purchases, Commonwealth Bank appears to agree with this view.
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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 Emerchants 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.
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