Why this ASX fund manager can't stop buying Cettire shares

Cettire shares have been highly volatile in recent weeks, but this fund manager has been taking advantage…

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Cettire Ltd (ASX: CTT) shares have certainly taken investors on a bit of a roller coaster in recent years.

The swings and roundabouts of this ASX online luxury retail stock's share price have become almost legendary on the stock market.

After all, this is a company that rose more than 700% in 2021, only to drop more than 90% at one point in 2022.

Its more recent share price performance has had a decidedly positive tilt though. Between 16 January and 16 February this year, Cettire shares have recorded an astonishing spike of more than 90%. This was spurred by an explosive earnings report that Cettire delivered on 7 February.

But then, last week, we saw the company slump 6% after news that Cettire founder and CEO Dean Mintz sold $127 million worth of shares became public. Just two days later, the company crashed by 27% following a media report that alleged its pricing didn't include hefty customs duties.

However, following clarification from Cettire, its sales have begun to recover.

In the past two trading days alone, Cettire has gained a rosy 3.8% or so.

Perhaps news that a major ASX fund manager has piled into Cettire has boosted the company's share price.

ASX fund manager piles into Cettire shares

Wilson Asset Management (WAM) is the fund manager behind popular listed investment companies (LICs) like WAM Capital Ltd (ASX: WAM).

We already knew that at least one WAM LIC owned Cettire shares, thanks to updates from WAM Microcap Ltd (ASX: WMI).

But according to a recent WAM webinar, the fund manager's flagship WAM Capital LIC has also been piling in. Oberg did disclose that WAM funds had been selling Cettire shares following the company's well-received earnings report last month.

At the time these earnings came out, Cettire shares rocketed more than 40% at one point, which reportedly prompted WAM to begin selling off some shares.

However, the fund managers changed their tune following the company's subsequent share price dip.

WAM Capital manager Oscar Oberg stated in the webinar that:

When the article [regarding the customs duties] came out, we knew the stock was going to fall a lot… so we took the liberty to buy more stock, and we've been buying more stock every day since.

So this effectively means that at least one WAM fund has been buying Cettire shares nonstop for over a week.

No doubt WAM investors will be thankful that their manager has been 'buying low' and 'selling high'. Let's see if their conviction is rewarded going forward.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire. 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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