Trading Places: The fund managers, founders & families who changed substantial holder positions
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In this weekly column, Stockhead overviews all substantial holder filings of ASX small caps.
Substantial shareholders are those holding 5 per cent or more. These could be company directors, individual investors or major institutions.
Companies are required to announce when new substantial holders have come on board, when they have ceased to be shareholders or when they change their holdings.
Doray Minerals (ASX: DRM) are a West Australian gold and copper miner which last November announced a merger with Silver Lake Resources (ASX: SLR). It has increased 75 per cent since the merger announcement from 32 cents to 55 cents.
Silver Lake Resources (ASX: SLR) also welcomed a substantial holder in small cap fund manager Paradice Investment Management with a 5.25 per cent stake.
The Commonwealth Bank prefers to invest in large caps so any small cap investment is worth noting. This week it became a substantial holder with a 5 per cent stake in ERM Power (ASX: EPW) – after slowly accumulating all year.
Crocodile Capital took a 7.37 per cent stake in Bowen Coking Coal (ASX: BCB) while AustralianSuper took an 8.49 per cent stake in daycare centre operator Think Childcare (ASX: TNK).
A number of companies saw new holders as a result of capital raises including Geopacific Resources (ASX: GPR), Dateline Resources (ASX: DTR) and ApplyDirect (ASX: AD1).
City Chic Collective (ASX: CCX) has been one of the best performers on the ASX in recent months rising from 11 cents in December 2018 to $1.63 now – an increase of nearly 1,300 per cent!
Founder Arnold Miller decided to sell $8.6 million worth of shares. Back in December 2017 such a parcel would have fetched just under $700,000 so it’s fair to say he picked the right time to sell now.
Ellerston Capital ceased to be a substantial holder in property developer Peet (ASX: PPC). It first bought shares in July 2015 when the share price was around $1.10.
Peet shares have gone as high as $1.48 in late 2017 but are now $1.00 and a $1.3m sale saw Ellerston fall under the 5 per cent threshold.
Small cap fund manager Regal sold its 5 per cent stake in financial administrator Mainstream Group (ASX: MAI) for $6.3m.
IOOF sold a 6 per cent stake in Red Bubble (ASX: RBL) and Challenger a 5 per cent stake in Think Childcare (ASX: TNK).
Among the notable increases was Spheria Asset Management’s increase in Mortgage Choice (ASX: MOC), from 15.54 per cent to 16.63 per cent.
Justice Kenneth Hayne’s recommendation to switch to a user-pays model led to fears for the industry’s viability. But the government and the opposition opposed the recommendation and the industry breathed a sigh of relief.
IOOF increased its stake in FIFO-flight provider Alliance Aviation (ASX: AQZ) from 5.4 per cent to 6.6 per cent through buying two lots of $1.9 million worth of shares last Thursday and the preceding Friday.
On February 1, Qantas bought a 20% stake in it and it made clear ‘a longer-term view of taking a majority position in Alliance Airlines’. IOOF sold $4.9 million of shares in the immediate week thereafter but now has more shares than it did before.
Samuel Terry Asset Management forked out $1.9m last Friday and $1.3 million on Tuesday to increase its stake in retail technology company Onemarket (ASX: OMN) from 10.1 per cent to 15.1 per cent.
As Stockhead reported on Friday, Mareterram (ASX: MTM) saw Sea Harvest reach 90 per cent of the company as it prepares to fully acquire the company. Its most recent disclosure put its stake at 95.4 per cent.
The Commonwealth Bank increased its stake in Apollo Tourism and Leisure (ASX: ATL) from 7.58 per cent to 8.72 per cent.
While Morgan Stanley bought $17.6 million, IOOF sold over $9 million of Doray Minerals (ASX: DRM) stock, reducing its stake from 12.24 per cent to 8.81 per cent. It also sold down a 9.32 per cent stake in Uniti Wireless (ASX: UWL) to 7.63 per cent.
Only hours after failing to topple the board at Factor Therapeutics (ASX: FTT), Pura Vida Energy (ASX: PVD) reduced its stake from 19.97 per cent to 12.39 per cent. It is still a substantial holder but it was a drastic action to take so fast after failing.
Midway (ASX: MWY) saw founder Greg McCormack and Nils Gunnerson reduce their stakes in the company from 41.4 per cent between them to 34.7 per cent.
As often happens when directors sell major stakes, the company put out a market announcement declaring they still were committed to the company.
However, they declared the purchase reflected “a desire of the Board of Directors to broaden and deepen the shareholder base in the Company and increase trading liquidity“.
They also promised they would not sell further shares at prices below the sell-down level until 1st half FY2020 results were released.