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.

Company Code Market Cap Holder Stake Status
Aura Energy AEE $12.1M Lind Partners 0.0589 Becoming
GBST GBT $177.9M Microequities Asset Mgmt 0.052 Becoming
Kingston Resources KSN $22.2M Winchester Investments 0.0916 Becoming
Mont Royal Resources MRX $8.9M Ilwella 0.0531 Becoming
Mont Royal Resources MRX $7.9M Michael O'Keefe 0.057 Becoming
Northern Minerals NTU $145.0M Lin Zhongxiong 0.0788 Becoming
Oakdale Resources OAR $4.0M RND Super fund 0.0948 Becoming
Gascoyne Resources GCY $41.2M NRW Holdings 0.0858 Becoming
Equatorial Resources EQX $36.1M Ian Middlemas 0.0603 Becoming
Incentiapay INP $14.6M Bhansali Capital 0.0507 Becoming
Northern Minerals NTU $145.0M Xue Congyan and Go & Company Ltd 0.0703 Becoming
Reverse Corp REF $3.2M Lane's End Dural 0.0735 Becoming
Smart Marine Systems SM8 $5.2M Paul Guilfoyle 0.0796 Becoming
Uscom UCM $22.0M John Gleeson 0.051 Becoming
Beacon Lighting Group BLX $230.2M Spheria Asset Management 0.0597 Becoming
Fiji Kava FIJ $3.6M Great Southern Flour Mills 0.0574 Becoming
K2Fly K2F $8.0M Narelle Fay 0.0521 Becoming
Nick Scali NCK $487.6M Ethical Partners Funds Mgmt 0.0668 Becoming
Troy Resources TRY $49.3M Prudential 0.1258 Becoming
Acrow Formwork & Construction Services ACF $61.2M Schroeder 0.0833 Increasing existing substantial
Anatara Lifesciences ANR $19.8M RTL Group 0.1007 Increasing existing substantial
Ellex Medical Lasters ELX $84.7M Australian Ethical Investment 0.0842 Increasing existing substantial
Bass Metals BSM $25.3M Rookharp Investments 0.0671 Increasing existing substantial
Empired EPD $48.0M Tiga Trading 0.1443 Increasing existing substantial
Gullewa GUL $4.8M Aliton Pty Ltd - Cyril Bell 0.061 Increasing existing substantial
Ironbark Zinc IBG $16.3M Toronga Pty Ltd & Dulyne Pty Ltd 0.1332 Increasing existing substantial
A2B Australia A2B $215.6M Spheria Asset Mgmt 0.1333 Increasing existing substantial
A2B Australia A2B $215.6M Investors Mutual 0.119 Increasing existing substantial
Aura Energy AEE $12.1M Asean Deep Value Fund 0.1394 Increasing existing substantial
Advance Nanotek ANO $260.4M Mizikovsky Group 0.4584 Increasing existing substantial
Data Exchange Network DXN $12.3M SG Hiscock & Company 0.0988 Increasing existing substantial
Gascoyne Resources GCY $40.2M Delphi 0.1844 Increasing existing substantial
Grand Gulf Energy GGE $3.1M Craig Burton 0.261 Increasing existing substantial
Imdex IMD $386.4M Yarra Funds Management 0.0625 Increasing existing substantial
Strategic Minerals SMC $27.5M QGold 0.8896 Increasing existing substantial
Thorn Group TGA $69.3M Somers 0.192 Increasing existing substantial
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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.

Company Code Market Cap Holder Current Stake Status
Actinogen Medical ACW $15.7M Australian Ethical Investment 0 Ceasing
Danakali DNK $206.3M The Capital Group 0 Ceasing
Finders Resources FND $173.5M Taurus Funds Mgmt 0.0002 Ceasing
Empired EPD $48.0M Pengana 0% Ceasing
Actinogen Medical ACW $15.6M Fidelity 0.0487 Ceasing
Empired EPD $48.0M Pengana 0 Ceasing
Emperor Energy EMP $3.1M Val Hovanessian 0.0326 Ceasing
Ziptel ZIP $2.6M Keaton Wallace 0.0048 Ceasing
Livetiles LVT $281.2M Regal Funds Management 0 Ceasing
Whitehawk WHK $15.9M RiverFort Global Opportunities PCC 0.0907 Decreasing
LandMark White LMW $22.6M Microequities Asset Mgmt 0.1067 Decreasing
Blue Sky Alternative Investments BLA $14.8M Fidelity 0.0674 Decreasing
Grand Gulf Energy GGE $3.1M Charles Morgan 0.1988 Decreasing
Synertec Corporation SOP $10.8M New Concept Corporation 0.4295 Decreasing
Western Areas WSA $588.1M Paradice Investment Mgmt 0.0733 Decreasing
Gtn GTN $291.6M QVG Capital 0.0641 Decreasing
Nick Scali NCK $487.6M Airlie Funds Management 0.0626 Decreasing
Whitehawk WHK $15.9M Darren Carter 0.113 Decreasing
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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.

Company Code Market Cap Holder Past Stake Present Stake
Total Brain TTB $18.8M Och-Ziff Capital Management 0.071 0.0606
Kingston Resources KSN $25.0M Farjot 0.0974 0.0799
Smart Marine Systems SM8 $3.5M Craig Anderson 0.2184 0.0764
Smart Marine Systems SM8 $3.5M Hamish Jolly 0.2167 0.0757
Spirit Telecom ST1 $52.8M Geoff Neate, Chloedarcy Investments and Eloise Leighton Pty Ltd 0.1216 0.1121
Altura Mining AJM $265.7M Shaanxi J&R Optimum Energy 0.1475 0.1231
Kingston Resources KSN $25.6M Slipstream Resources Investments 0.1122 0.0895
Kingston Resources KSN $25.6M Sandfire Resources 0.0928 0.0752
Northern Minerals NTU $145.0M Liu Xiaohua 0.0777 0.0578
New Standard Energy NSE $3.3M China International Economic Huizhou Energy Investment 0.4065 0.3542
New Standard Energy NSE $3.3M Jara Resources 0.1375 0.0799
Betmakers Holdings TBH $11.8M Industry Super Holdings 0.1373 0.106
Spirit Telecom ST1 $51.3M Crazy Diamond (Peter & Diana Diamond 0.1999 0.1958
Security Matters SMX $54.4M Dagania Business Agricultural Cooperative Society 0.1078 0.0959
Security Matters SMX $54.4M Kibbutz Ketura 0.2075 0.1845
Company Code Market Cap Holder Past Stake Present Stake
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