Trading Places is Stockhead’s weekly wrap of ASX small cap substantial holder filings. Substantial holders are defined as those holding 5 per cent or more of a company’s shares and these could be directors, individual investors or institutional investors.

Shareholders are required to announce to the exchange when their shareholding becomes substantial, when they have ceased to be substantial shareholders or any change in their holdings above 5 per cent.

‘Ethical’ buyers

This week there were two big purchases by fund managers that deemed themselves ethical. Ethical Partners Funds Management bought a 6.68 per cent stake in furniture retailer Nick Scali (ASX: NCK), paying $27.8 million.

No matter how ethical a company may be, investing is about making money and you cannot deny this one has been a money maker. Nick Scali made a $25 million half yearly profit and paid a 25 cent per share dividend (representing a 4 per cent yield).

Another “ethical investor”, Australian Ethical Investment was already a substantial holder in eye laser firm Ellex (ASX: ELX). But this month it’s topped up its holdings to 8.42 per cent, which cost it $1 million this month.

Also this week it completely sold out of Actinogen Medical (ASX: ACW). This sale netted them $1 million – thus explaining where it got the money to pay for the larger stake in Ellex.

It turned out Actinogen’s anti-Alzheimers drug was ineffective and shares fell nearly two thirds. But the stock was not totally wiped out like Factor Therapeutics (ASX: FTT) so it was able to escape with something.

You might be wondering how an investor can call themselves ethical. This is difficult because there is no fixed definition on what ethical investing is.

Some believe it’s just avoiding stocks they think are unethical (such as gambling). Others believe it is only investing in stocks proactively ethical (environmental stocks perhaps). Sometimes they just follow advice on what others believe are ethical.

The other buyers

Prudential subsidiary, M&G investments, took a 12.6 per cent stake in gold explorer Troy Resources (ASX: TRY). As we reported on Tuesday, it made up 83 per cent of its $7.6 million capital raising. The money raised puts its gold project in Guyana in good stead.

Spheria Asset Management bought a 5.97 per cent stake in lighting retailer Beacon Lighting (ASX: BLX) with $3.7 million.

It also increased its holding in A2B Australia (ASX: A2B) which was until recently Cabcharge. Spheria now holds 13.33 per cent and was joined by fellow fund manager Investors Mutual which topped up its holdings to 11.90 per cent. Both firms have poured in $9 million between them since February.

Eighteen months after appointing NRW as its mining contractor, Gascoyne Resources (ASX: GCY) welcomed it as a substantial holder with a holding of 8.58 per cent. NRW paid over $4 million in a rights issue.

Gascoyne also saw Delphi top up its existing substantial holding to 18.44 per cent after Delphi put in $6.7 million, again in the share purchase scheme.

CompanyCodeMarket CapHolderStakeStatus
Aura EnergyAEE $12.1MLind Partners0.0589Becoming
GBSTGBT$177.9MMicroequities Asset Mgmt0.052Becoming
Kingston ResourcesKSN$22.2MWinchester Investments0.0916Becoming
Mont Royal ResourcesMRX$8.9MIlwella0.0531Becoming
Mont Royal ResourcesMRX$7.9MMichael O'Keefe0.057Becoming
Northern MineralsNTU$145.0MLin Zhongxiong0.0788Becoming
Oakdale ResourcesOAR$4.0MRND Super fund0.0948Becoming
Gascoyne ResourcesGCY$41.2MNRW Holdings0.0858Becoming
Equatorial ResourcesEQX$36.1MIan Middlemas 0.0603Becoming
IncentiapayINP$14.6MBhansali Capital0.0507Becoming
Northern MineralsNTU$145.0MXue Congyan and Go & Company Ltd0.0703Becoming
Reverse CorpREF$3.2MLane's End Dural0.0735Becoming
Smart Marine SystemsSM8$5.2MPaul Guilfoyle0.0796Becoming
UscomUCM$22.0MJohn Gleeson0.051Becoming
Beacon Lighting GroupBLX$230.2MSpheria Asset Management0.0597Becoming
Fiji KavaFIJ$3.6MGreat Southern Flour Mills0.0574Becoming
K2FlyK2F$8.0MNarelle Fay0.0521Becoming
Nick ScaliNCK$487.6MEthical Partners Funds Mgmt0.0668Becoming
Troy ResourcesTRY$49.3MPrudential0.1258Becoming
Acrow Formwork & Construction ServicesACF$61.2MSchroeder0.0833Increasing existing substantial
Anatara LifesciencesANR$19.8MRTL Group0.1007Increasing existing substantial
Ellex Medical LastersELX$84.7MAustralian Ethical Investment0.0842Increasing existing substantial
Bass MetalsBSM$25.3MRookharp Investments0.0671Increasing existing substantial
EmpiredEPD$48.0MTiga Trading0.1443Increasing existing substantial
GullewaGUL$4.8MAliton Pty Ltd - Cyril Bell0.061Increasing existing substantial
Ironbark ZincIBG$16.3MToronga Pty Ltd & Dulyne Pty Ltd0.1332Increasing existing substantial
A2B AustraliaA2B$215.6MSpheria Asset Mgmt0.1333Increasing existing substantial
A2B AustraliaA2B$215.6MInvestors Mutual0.119Increasing existing substantial
Aura EnergyAEE$12.1MAsean Deep Value Fund0.1394Increasing existing substantial
Advance NanotekANO$260.4MMizikovsky Group0.4584Increasing existing substantial
Data Exchange NetworkDXN$12.3MSG Hiscock & Company0.0988Increasing existing substantial
Gascoyne ResourcesGCY$40.2MDelphi0.1844Increasing existing substantial
Grand Gulf EnergyGGE$3.1MCraig Burton0.261Increasing existing substantial
ImdexIMD$386.4MYarra Funds Management0.0625Increasing existing substantial
Strategic MineralsSMC$27.5MQGold0.8896Increasing existing substantial
Thorn GroupTGA$69.3MSomers0.192Increasing existing substantial


Australian Ethical Investment weren’t the only fund manager that sold its shares in Actinogen Medical (ASX: ACW). Fidelity did as well, although it was not a complete sell-out. It sold 15 million shares for just over $200,000 and is no longer a substantial holder – with 4.87 per cent.

This is the second biotech investment gone wrong for Fidelity in recent months. They also invested in Factor Therapeutics (ASX: FTT) before it collapsed.

While reaping $200,000 may have been better than nothing, it did fork out over three times that ($676,000 to be exact) for a similar parcel only a month earlier.

Potash producer Danakali (ASX: DNK) saw Los Angeles-based fund manager the Capital Group sell out after holding for two years. According to the substantial holder notices filed with the ASX, it first bought 16.7 million shares for $10.35 million. Then earlier this year it sold 1.69 million shares for $1.26 million and last week the remaining 15 million shares went for $8.9 million, representing a small loss.

Paradice Investment Management decreased its stake in nickel producer Western Areas (ASX: WSA) to 7.33 per cent with $3.6 million in net sales in recent months – $1.8 million of which was in May.

Regal Funds Management sold out of software stock Livetiles (ASX: LVT), netting $4.6 million, while Airlie Funds reaped $5.2 million ($3.7 million of which from last Friday) by reducing its stake in Nick Scali (ASX: NCK) to 6.26 per cent.

Ex-Strathfield chairman Val Vovanessian halved his stake in Emperor Energy (ASX: EMP) after his takeover bid failed. He now only holds 3.26 per cent.

You may recall yesterday morning we mentioned that Bubs Australia (ASX: BUB) founder Kirsty Carr had sold $5.8 million of shares to buy a house. Her holdings were under 5 per cent so she was not a substantial holder.

But that was not the biggest sale we noticed. Taurus Funds Management sold $20 million in Finders Resources (ASX: FND). But this was because the copper exploring company is being acquired.

By this stage of the process, Taurus had no choice. Once a bidder has over 90 per cent of a company they have the power to acquire the remaining holdings and this is what Eastern Field Developments did.

CompanyCode Market CapHolderCurrent StakeStatus
Actinogen MedicalACW$15.7MAustralian Ethical Investment0Ceasing
DanakaliDNK$206.3MThe Capital Group0Ceasing
Finders ResourcesFND$173.5MTaurus Funds Mgmt0.0002Ceasing
Actinogen MedicalACW$15.6MFidelity0.0487Ceasing
Emperor EnergyEMP$3.1MVal Hovanessian0.0326Ceasing
ZiptelZIP$2.6MKeaton Wallace0.0048Ceasing
LivetilesLVT$281.2MRegal Funds Management0Ceasing
WhitehawkWHK$15.9MRiverFort Global Opportunities PCC 0.0907Decreasing
LandMark WhiteLMW$22.6MMicroequities Asset Mgmt0.1067Decreasing
Blue Sky Alternative InvestmentsBLA$14.8MFidelity0.0674Decreasing
Grand Gulf EnergyGGE$3.1MCharles Morgan0.1988Decreasing
Synertec CorporationSOP$10.8MNew Concept Corporation0.4295Decreasing
Western AreasWSA$588.1MParadice Investment Mgmt0.0733Decreasing
GtnGTN$291.6MQVG Capital0.0641Decreasing
Nick Scali NCK$487.6MAirlie Funds Management0.0626Decreasing
WhitehawkWHK$15.9MDarren Carter0.113Decreasing


Two notable dilutions occurred in Smart Marine Systems (ASX: SM8). You may remember them as the company who sell shark-monitoring systems.

Directors Craig Anderson and Hamish Jolly held over 40 per cent between them but their stakes were diluted by nearly two-thirds due to a capital raising.

Also three shareholders of Kingston Resources (ASX: KSN) were diluted despite participating in the placement. Slipstream Resources, Sandfire Resources and private investment company Farjoy.

Who are Farjoy? The family trust of barrister Tim Robertson SC.

CompanyCodeMarket CapHolderPast StakePresent Stake
Total BrainTTB$18.8MOch-Ziff Capital Management0.0710.0606
Kingston ResourcesKSN$25.0MFarjot0.09740.0799
Smart Marine SystemsSM8$3.5MCraig Anderson0.21840.0764
Smart Marine SystemsSM8$3.5MHamish Jolly0.21670.0757
Spirit TelecomST1$52.8MGeoff Neate, Chloedarcy Investments and Eloise Leighton Pty Ltd0.12160.1121
Altura MiningAJM$265.7MShaanxi J&R Optimum Energy0.14750.1231
Kingston ResourcesKSN$25.6MSlipstream Resources Investments0.11220.0895
Kingston ResourcesKSN$25.6MSandfire Resources0.09280.0752
Northern MineralsNTU$145.0MLiu Xiaohua0.07770.0578
New Standard EnergyNSE$3.3MChina International Economic Huizhou Energy Investment0.40650.3542
New Standard EnergyNSE$3.3MJara Resources0.13750.0799
Betmakers HoldingsTBH$11.8MIndustry Super Holdings0.13730.106
Spirit TelecomST1$51.3MCrazy Diamond (Peter & Diana Diamond0.19990.1958
Security MattersSMX$54.4MDagania Business Agricultural Cooperative Society0.10780.0959
Security MattersSMX$54.4MKibbutz Ketura0.20750.1845
CompanyCodeMarket CapHolderPast StakePresent Stake