I like to keep an eye on the substantial shareholder notices that are released to the ASX. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.
Two notices that have caught my eye this week are summarised below. Here’s what these fund managers have been buying:
Adairs Ltd (ASX: ADH)
A notice of initial substantial holder reveals that Commonwealth Bank of Australia (ASX: CBA) has been buying this homewares retailer’s shares. According to the notice, the banking giant and its subsidiaries have been building a position in the company since the middle of March. This was at a time when the Adairs share price had crashed lower at the height of the market volatility. In fact, the bank was able to pick up a large parcel of shares for as low as 63 cents each.
It has continued to buy through the recovery and was buying shares as recently as 15 July. That purchase brought its holding to just over 8.6 million shares, which represents a 5.09% stake in the company. At the time of writing the Adairs share price is trading at $2.37, which isn’t overly far from its 52-week high of $2.77. This certainly appears to have been a successful investment by Commonwealth Bank.
Uniti Group Ltd (ASX: UWL)
Another notice of initial substantial holder shows that Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has become a major shareholder of this telecommunications company. According to the notice, the investment house has made a series of share purchases between 1 June and 13 July. The most recent purchase at the start of the week was for $4 million worth of shares and took its holding to a total of 24,906,745 shares. This equates to a 5.05% stake in Uniti Wireless.
I estimate that the average price it paid for the shares in this notice was approximately $1.65. So with the Uniti Wireless share price currently trading at $1.46, Washington H. Soul Pattinson clearly sees a lot of value in them at this level. And given its long track record of successful investments, it could pay to follow this trade.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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