Since its annual report was released at the end of August, there has been a lot of activity by major investors in non-bank lender Yellow Brick Road Holdings Ltd (ASX: YBR).
I'm not surprised since results of this quality are extremely hard to beat; in fact, the closest recent competitor is probably Yellow Brick Road's own half-yearly report back in March.
The latest movements from major investors include:
Mark Bouris (chairman) – acquired 6 million shares (total voting power of 18.4%).
Nine Entertainment Co Holdings Ltd (ASX: NEC) – acquired ~17 million shares (total 17.8%).
Apollo Global Management LLC (NYSE: APO) – acquired ~17 million shares (total 17.8%).
Macquarie Group Ltd (ASX: MQG) – acquired ~23 million shares (total 18.35%).
Acorn Capital Limited – initial substantial holder, acquired ~16 million shares (total 6%).
As readers can see, just these five investors hold nearly 80% of the company between them.
Fortunately at least three of the above – Mr Bouris, Macquarie and Nine Entertainment, have their own business interests that are linked in some way to Yellow Brick Road's success, making their vested interests just that much more important.
Such strong institutional ownership is likely to see the share base tightly held, and investors may have a few more opportunities to pick up a bargain if low liquidity constrains the share price.
Although with that said, Yellow Brick Road continues to look like a bargain regardless of where day-to-day market fluctuations take it.
Up only 12.4% for the past 52 weeks, the modest price rise belies the strength in underlying earnings that should see this micro-cap deliver its maiden profit in 2015.
With total revenue rising 27% and huge growth in mortgage, life insurance and funds under management/advice, Yellow Brick Road has a powerful business model that its ever increasing number of branches can leverage over the coming years.
In fact, it also has a lot in common with The Motley Fool's Top Stock recommendation for 2014-2015.
Both are financial companies with sound business models, major plans for rapid expansion, and both are experiencing considerable growth in their respective industries.
The Motley Fool's recommendation isn't growing quite as fast as Yellow Brick Road, mostly because it is larger in size and that sort of growth becomes exponentially harder to achieve over time.
However its growth figures still hover around a very respectable 15% p.a. after five consecutive years of similar performance; and it pays a great dividend to boot.
Trading on an undemanding valuation, there's something for everyone in The Motley Fool's latest recommendation – that's why I own it – and I recommend all interested investors check out our free report.
To access it, simply click on the link below and enter your email address – it takes less than 30 seconds – and we'll send it to you, completely FREE!
