Guess which ASX 300 stock popped on major shareholder buying the dip

Drama has not put this shareholder off from adding to their position.

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Warren Buffett's long-standing sage advice is "to be fearful when others are greedy and to be greedy when others are fearful." The third-largest holder of an ASX 300 stock is putting this advice into action by adding to its stash.

Shares in Cettire Ltd (ASX: CTT) have taken a hit over the past month and a half. However, the falling share price has attracted the attention of US-based investment firm Cat Rock Capital. Undeterred by recent news, the investor ramped up its position in the online luxury fashion platform.

Hungry for an ASX 300 stock at a discount

On 6 March, The Australian Financial Review alluded to inadequacies in customs duties on goods. This prompted a sell-off in Cettire shares as shareholders grew concerned about any implications if there were any skeletons in the closet.

Cettire quickly addressed the concerns in a release of its own. However, the damage control proved insufficient to prevent the Cettire share price from falling a further 16% over the time since, as shown below.

More pressure mounted in the back half of March as additional information came to light.

Once again, The AFR reported on a Texan resident in the United States and their experience with the luxury fashion business.

In the article, Jane (a pseudonym) reveals how she noticed discrepancies between the duties paid at the online checkout and what the customs documentation showed. Namely, paying more to Cettire than what the courier invoiced.

Moreover, the price of the goods disclosed to the courier was less (US$4600) than the actual purchase amount (US$6663).

Despite these matters, according to today's change in substantial holding notice, Cat Rock Capital has been loading up on this ASX 300 stock. The investment firm now holds a 10.44% position in Cettire, increasing by 4 million shares.

Some of the largest buys occurred on 6 March — when the Financial Review's investigation landed — 11 March, 4 April, and 5 April.

Not alone in buying the dip

Cat Rock Capital is not the only party betting the pessimism is misplaced. As fellow Fool Sebastian Bowen covered last month, Wilson Asset Management (WAM) has been making the most of Cettire's subdued sentiment — buying shares at every chance.

Likewise, Bell Potter believes there's nothing to be worried about at Cettire. The broker holds a $4.14 price target on the company's shares, suggesting a 23% upside from the current price.

The ASX 300 stock closed at $3.37, up 1.8% from yesterday. Although shares had reached a high of $3.55 earlier in the day.

Motley Fool contributor Mitchell Lawler 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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