top 20 analysis from annual report

After seeing the EQH Annual Report released yesterday, I thought I’d make a quick comparison of the Top 20 shareholders as per the annual report and upon listing. Given that to enter the Top 20 you only need 180K shares, it’s not hard to get your name in there.

According to what I could ascertain, there has been just under 2.25m shares trade since listing – about 18% of the tradable issued cap of 12.5m. From reports lodged with the ASX, we know for a fact that Ikin has bought an additional 225K, & NS Hong an additional 200K. I know that I have bought over 100K (& that is not going anywhere in a hurry), so there is about 25% of the stock sold accounted for that has been locked away.

A new addition to the Top 20 is David John Ikin & Ildiko Ikin with 340K shares. I have no idea who they are but you don’t need to be a genius to work out that there is some form of family connection. A David Charles Salmon has 200K & is a new addition. WB Nominees has added 58K to take their holding to 558K, so that accounts for an additional almost 600K assuming Salmon & Ikin were non-holders at listing date – another 27% of the stock traded.

Sellers of stock from the initial Top 20 include Ben Ikin (40K -so much for family loyalty), Gurney Capital Noms. (100k, now holding 200K) and Troy Valentine (200K - one of the seed capitalists). Whether he has sold all or part of his 200K, I have no idea.

An ability to compare Top 40s would add much more certainty to this analysis.

Another very interesting fact is the spread. For a company to list on the ASX it requires at least 400 shareholders with a marketable parcel. A marketable parcel is deemed to be shares to a value of $2,000 - in the case of EQH, 10,000 shares. Apparently that’s what took EQH so long to get listed as it was struggling to find spread as the seed investors couldn’t be included in the numbers. That’s why there are so many lines of 10,000 shares being sold – it’s the rats & mice who were given stock for spread.

Upon listing, EQH had a total of 455 shareholders with 325 of them (71.5%)holding between 5,001 & 10,000 shares. As at 7 Sept. there is a total of 369 holders with over 5,001 shares (including seed), with 239 of those holders (65%) holding between 5,001 & 10,000 shares.

Guess what I’m trying to say is what I have thought all along has been correct. This stock was very tightly held upon listing. Given that it listed in a crappy market, there was nothing to be gained from price appreciation in that environment; rather it was best to wait & shake out the loose holders & spread holders. And that is exactly what has happened.

EQH is now super tight as Ikin has bought more on market, people seemingly close to Ikin have bought more on market and the major shareholder has been buying. What does that tell you? It tells me that stock is changing hands from the uninformed to the informed & you don’t have to be a rocket scientist to figure out what that means for short & medium term price appreciation.

EQH is up 60% from its IPO price on effectively no news. It has done this on volume of approx. 2.25m shares. A move from the 32c level to 50c would mean another approximately 60% move from current levels. I doubt very much that it will take another 2.25m shares to achieve this.