"Becoming a substantial share holder"

Discussion in 'Stocks & Derivatives' started by SilverSanchez, Feb 20, 2013.

  1. SilverSanchez

    SilverSanchez Active Member

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    You might ignore the releases normally, but you may notice an increase in these notices with your various mining stocks.

    Lets take some time to consider what it means....

    Lets just say a company has 60% retail shareholders - retail investors buy more, or sell, and there is no release

    - that means that the majority of the shares are held by the 'herd' - you have to assume they know the least and the worst to follow

    Lets just say a company has 60% institutional shareholders - they buy more and the company issues a 'substantial holding release'

    - that means one (or both) of two things, either this is a great play (on market purchase) or they got it cheap via a deal (placement) - worth paying attention

    Lets just say managment hold 20% (which is high for managment investment)

    - managment know the most about the company, so when they buy you should take notice
    Some Suggestions
    When a geologist buys 'on market' in an explorer it could mean 1. great potential deposit (check their history and experience they might be dilluded)
    When a businessmen managment types buy 'on market' in a producing company 1. Fundamentals and future must be good

    When a managment in general buy 'on market' and hold direct shares - that is always worth paying attention to - its important though you do your own homework on the company to make sure you want to own it in the first place.

    Just remember its worth looking at - its not a reason to buy anything in and of itself.
     

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