Top 20 Holders of a Stock and the importance of them Collated by Freehold
Poster: Kdoc Date: 10/09/16 Time: 20:27:05
Post #: 19073019 Hi shortermers, this is a good topic, lets explore the whys and wherefores of following Top20. @minoil considers it to be crucial and IS the selected topic. Thanks, would like to have some expand on this. Love to hear some more input. I only use it to confirm that there are either some instos in a stock (but they could be out at the drop of at hat). Hold NAN and there are always significant buys then sells from same intso - so I just say - here we go again. Really no significance in the whole scheme of things in that one. But I do like to see PIE funds taking a stake in one of the micro/small cap that I hold or am interested in. So any other info is always welcome.
Poster: minoil Date: 10/09/16 Time: 20:56:42
Post #: 19073229
Dont know about "crucial", but believe the T20 is highly important.......... for example, with a shell, you have no business model, it is primarily the management, and usually the bigger holders who are driving the company for resource plays, you need holders and management who understand the game, and, will be supportive of the business. While exploration success is what drives a mining minnow, its always a plus to see someone like Creasy, for example, to have a decent lick of stock. For a shell, seeing someone like David Hannon is a plus, as he appears on a lot of shells at their early stages. TPR, a few months back, when associated players emerged on the register, it put the company in the spotlight as a shell style stock that was being set up. @kmac not my scene, but agree when you talk of seeing funds taking a stake. More often than not, a stock is driven by the people owning it, so, knowing who they are is as important as the stock itself, and, rummaging through the lists, researching names to form a knowledge base is absolutely useful...........just pure detective work, thats how you dig up the runners in their early stages. I'm sure others could put their thoughts and insights to text better than i can, and would be good to see, as, it is a huge field to explore............and, it can be fun, cos you never know what can turn up
Poster: YStrategy Date: 10/09/16 Time: 20:43
Post #: 19073145 I use a Top 20 to work out the number of shares tightly held.I also go into the major holders and work out their average price.If I know how much they paid this is useful to get an idea if they are in profit or not in profit to sell.If the top 20 is tightly held and you take a holding that you can then move the price up based on value.
Poster: Sector Date: 11/09/16
time: 10:14
Post #: 19076376 T20. Min, If you are calling it equal or more important than balance sheet - then I'd say that's "crucial". But I do get where you are coming from re: shell, as you say, sometimes the T20/Director stake is the best FA you have. I wouldn't put T20 over balance sheet, as that would put director and major holders in some super human category when if the balance sheet is shot/ indebted/ poor sector or market conditions...anyone will struggle. Other thing to be careful of is 'success replication'. A very successful exit on one deal can give superhero like status, when many times and majority of influences were because of very positive sector/ macros conditions. Can make an average director/MD look much better. Some "luck" involved. If someone gets known for multiple great moves/ deals in many market conditions, or just surviving a tough downturn, then they would be worth following more than a "one hit wonder". *As an example. Richard Cottee grew QGC from 20c to $5.60? T/O in a majorly positive and strongly uptrending CSG macro environment. Made many millionaires along the way, and some got god-like status. Now gas market has been tougher, and he is in charge of CTP, a minnow that has made progress, but SP has gone backwards 80% since he took reigns. If he can pull 2nd rabbit out of hat with CTP, then he is indeed a strategic master, not magician. Market factors again will help decide. Finally, these execs/ directors are mostly "salarymen" , and most take less risk then you as an investor. Some of these listed businesses that have chewed through 10s millions shareholder funds whilst getting handsomely rewarded would not survive a few years in the private sector. I like to see them putting some of their salary back into the stock "on market trades" rather than just the gravy train of exec
Poster: Anton Chigurhr Date: 11/09/16 Time: 10:42
Post #: 19076601 Agree, balance sheet most important for semi and fully established microcap industrials (i.e. with revenue) as it's the best look at the company's vitals that we'll ever get, without being an insider. For shell style setups, T20 is one of the most important factors in my book. Getting to know the players about town and their track record is like broker data; it's not a silver bullet to guaranteed returns but it's a really important piece of the puzzle that can tip the odds in your favour. Example. If you see: Mycatmax, Deck Chair Holdings, Mahsor Holdings (Cygnet) getting set in a shell, you know your goal is to get a piece of the register as close to their buy-in price as possible. You also know there's a pretty good chance of seeing a decent acquisition and epic pump at some point (see OTE/ISX, GSC, ITT/1PG, CVE/BID, DMY/FBR, GRK/BKT). No-brainer stuff, with the distinguishing feature being the names you spot on the T20 and little else. There's dozens of examples like the above one, with varying degrees of reliability in the T20 name you see, which will influence how hard you go at the stock. Anyone playing the shell/micro end of the market should have a mind map of all the holding names and players in the game, so that you can whip through a T20 and know immediately who's onboard and what the potential is.
Poster: Sector Date: 11/09/16 Time: 11:41
Post #: 19077126 TOP 20/ Substantial Shareholders SSH notices - Investor/ Funds AND associates 1. Form 603 - Notice of becoming a substantial shareholder. (5% or more) 2. Form 604 - Change in substantial holder.(1% change) 3. Form 605 - Ceasing to be a substantial holder (goes under 5%) *2 business days to lodge. One of the most important notices for me to investigate a stock. SSH movements have been one of my best smoke signals for a long time (and I am sure many others here) These notices to me, with further investigation, mean catalysts. Could be precursor to takeover, could be strategic for agitation, management shakeup or blocking stake but very often, it means shareprice action. Many examples from my trades over the last year. UML, RMS and IAU would be another one to review.. Recent small cap DSB. Value Fund takes 11% and announced day before, good report comes out + renewed divvy, stock up 100% in a week. Larger cornerstone investors/funds tend to lock up stock for longer, so FREE FLOAT gets smaller. Major listed players buying in to juniors for T/O precursor or JV/funding support. Current examples MSR + RSG Resolute Mining (On market aggressive buying) VXR + Northern Star (Project/ drilling raise support) I'd be interested in STTers putting up some more major SSH moves currently like the above 2. for research. Keeping tabs on minnows being chased/ supported by majors would be a great list to create. One of the best and user friendly tools in the smokehouse
Poster: Anton Chigurhr Date: 11/09/16 Time: 11:44
Post #: 19077144 Absolutely. I think John435 has spoken at times about his "no-go" list of directors that he avoids. Everyone should probably have one of these too. I'm fairly liberal with this rule but for terrible directors, it just means i need to have an entry at least as low as them or lower and the shell would need to have other redeeming qualities to make it worth the risk. Usually though, I'll just pass on these ones and look for quality, where all the ducks line-up: mgmt with track record, mgmt good skin in the game, getting in close to or below director/broker's price, right wording in recent qtr report, broker buying etc
