Tuesday, August 19, 2008

Big Fisher & Paykel Healthcare share trades a curious tale

Some very large volume trades of various stocks were traded on and off the NZX today.

Big volumes of Telecom NZ [TEL.NZ] Fletcher Building [FBU.NZ] Sky City Entertainment [SKC.NZ] and Fisher & Paykel Healthcare [FPH.NZ] went through before market opening today.



Chart for Fisher & Paykel Healthcare Corp (FPH.NZ)


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Of principal interest to me was 13,649,401 million shares of FPH being traded.

That volume traded represents just over 2.5% of the total of 509,452,817 million shares on issue as at 22 May 2008.

Big volumes of a similar number were last traded in June at around $2.40 and over the last year larger volumes have traded when the stock price hit new lows.

A large number of shares traded of a particular listed company above the daily average is usually a significant occurrence and smaller shareholders should keep an eye out for large money managers building stakes in undervalued companies, should they want to get in on the action.

Substantial holders owning between 9-14 million shares each, range from the Accident Compensation Corporation with 9.693 million shares, the NZ Superfund with 12.09 million shares, and JP Morgan Nominees (Aust Ltd) with 14.057 million shares, with 6 other much larger holders owning around 9-11% each.

The last substantial movement in Fisher stock was on 21 July and a half a dozen players have been amassing stakes of around 10% each as the stock has become cheaper over the last year with UBS Nominees most recently adding to their holdings to take their total to just under 9%.

Summary for: UBS Nominees Pty Ltd and its related bodies corporate
For this disclosure,-


(a) total number held in class: 39,345,377
(b) total in class: 509,476,963
(c) total percentage held in class: 7.723%
For last disclosure,--
(a) total number held in class: 45,192,939
(b) total in class: 509,037,055
(c) total percentage held in class: 8.878%



On June 6 AXA Asia Pacific Holdings Limited acquired a substantial stake for the first time of just over 5%.

Summary for the
AXA Group

For this disclosure,--
(a) total number held in class: 26,342,324
(b) total in class: 509,452,817
(c) total percentage held in class: 5.17%


There have also been large crossings by Caledonia Investment's Ply Ltd.

The most interesting substantial shareholder to me is a recent one. Schroder Investment Management Australia began with an investment of 29,988,254 million shares or 5.9% on December 11 2007 and have progressively bought shares since then to end up with a stake of 47,573,694 shares or a 9.34% in Fisher and Paykel Healthcare.

Their rapid accumulation makes me wonder that it might be them who have purchased a large stake today-the market will find out for sure tomorrow. Schroders is a global asset management company with US$259.1 billion under management at 30 June 2008 and around $AU12 billion under management at its Australian branch office.

Their investment approach is one that aligns with mine and they certainly seem to be practicing it in buying up FPH.

We are long-term investors: establishing the fair value of a security takes the discipline to avoid being caught up in market fashions and the confidence to be contrarian when necessary. We focus on the ability of a business to generate sustainable value and earnings growth. We look at the quality, as well as quantity, of earnings and we meet company managers and ensure that we fully understand their marketplace and business strategy. We believe that, over time, the mis-pricing of stocks versus fair value will be recognised by the market, and that our long-term approach to research will lead to long-term outperformance.

Clearly Schroders see Fisher & Paykel Healthcare as a "quality earner" and they see the market mis-pricing the stock-it has been severely marked down over the last year.

I recently bought more at $2.35 a few months ago, with a long-term view for good growth based on the company's well placed R & D research and resultant innovative products successfully brought to market.

Schroders would have an approx 11.5% of fisher shares if they were today's substantial buyer which would make them the number 2 largest holder, behind HSBC Nominees with an 11.84% stake as at 22 May 2008.

Fisher & Paykel Healthcare shares were up 7c to NZ$2.95 in trading today(19 August NZ time)


Fisher & Paykel Healthcare @ Share Investor

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FPH downgrade masks good performance

Related Links

Schroder Investment Management Australia
Schroder Investment Management Home

Fisher & Paykel Healthcare financial data


Related Amazon Reading

The Business of Healthcare Innovation
The Business of Healthcare Innovation
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