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 are summarised below:
Costa Group Holdings Ltd (ASX: CGC)
One of Australia's leading fund managers has continued to increase its holding in this struggling horticulture company. According to a substantial holder notice, just a couple of weeks after purchasing 6.5 million shares, Perpetual Limited (ASX: PPT) has dipped into the market again. It added another 4.8 million shares, lifting its stake in Costa from 11.84% to 13.04%. Judging by these purchases, Perpetual appears increasingly confident that Costa is over the worst of its issues after a disastrous 12 months.
Elders Ltd (ASX: ELD)
Perpetual has also been buying the shares of this agribusiness company. A notice of change of interests of substantial holder reveals that it has increased its holding in Elders by almost 2.3 million shares to 9,705,816 shares. This has lifted Perpetual's holding from 5.25% to 6.25%. The fund manager may be confident that Elders' acquisition of AIRR will be a game-changer and drive solid profit growth in the coming years.
Vocus Group Ltd (ASX: VOC)
A change of interests of substantial holder notice reveals that Challenger Ltd (ASX: CGF) has been buying this telco company's shares. It has snapped up almost 7 million shares this month, lifting its holding to 57,691,183 shares. This means it now has a 9.3% stake in Vocus. Interestingly, Challenger isn't the only fund manager buying shares. Earlier this month Greencape Capital increased its stake by almost 19% to 42,104,971 shares. This purchase gave it a 6.78% interest in the company.
