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.
Three notices that have caught my eye this week are summarised below:
Costa Group Holdings Ltd (ASX: CGC)
One of Australia's leading fund managers has taken advantage of a sharp pullback in this horticulture company's shares to top up their position. According to a substantial holder notice, Perpetual Limited (ASX: PPT) has lifted its stake in Costa from 10.21% to 11.84% through the addition of ~6.5 million shares. The Costa share price is down 63% this year and to a level that Perpetual appears to believe is great value.
HUB24 Ltd (ASX: HUB)
According to a change of interests of substantial holder notice, ECP Asset Management has been buying more of this investment platform provider's shares. The notice reveals that the active investment company has increased its stake from 6.6% to 8.37% through the purchase of approximately 1.1 million shares. The ECP portfolio has outperformed its benchmark significantly since 2010, so it could pay to take notice when it makes investments like these.
SRG Global Ltd (ASX: SRG)
Australia's biggest bank, Commonwealth Bank of Australia (ASX: CBA), has been buying the shares of this engineering-led specialist construction, maintenance and mining services company. According to a substantial holder notice, the banking giant has lifted its interest in SRG Global from 7.43% to 8.48%. This was through the purchase of over 5 million shares earlier this month. The SRG Global share price is down 20% since the start of the year. CBA appears to have seen this as a buying opportunity. It could be on the money with this one. Last week the company revealed that it has been awarded preferred tenderer status for a new $90 million multidisciplinary asset services contract with Alcoa of Australia.
