Contrarian Investors

Two big moves on the market in recent days have been into Fairfax and Baxter, the Prospector finds, stocks that have disappointed investors recently.

By The Prospector ·
29 May 2006

Fortune favours the brave '¦ or is it fools rush in? Last week's highly volatile sessions on the ASX may well have created some strong buying opportunities. Certainly, some of the biggest fund managers in the local market were busy buying stock, especially in defensive companies such as John Fairfax Holdings, in which Portfolio Partners lifted its stake from 5.1% to 6.1%.
If Portfolio Partners was going against the grain in showing faith in Fairfax, the Melbourne-based institution also took a contrarian stance by adding to its holding in the Baxter waste management group. Baxter, chaired by AFL chief executive Andrew Demetriou, has already disappointed key investors such as Richard Pratt's Thorney Holdings when it recently downgraded its profit outlook. But Portolio Partners clearly believes the stock is heading for better times ahead, lifting its stake from 7.6% to 9%.

The bulk of the Baxter shares may have been crossed from Colonial First State after it dropped its stake in Baxter from 7% to 5%. Colonial has also been accumulating stock in the gold company Oceana. Colonial's Oceana holding rose from 6% to almost 8%. Oceana shares have been in the market since a major restructure last month saw its one time 56% shareholder ' the Perth-based GRD group ' sell most its stake at a record price.

Also active in the gold market were interests associated with tycoon John Calvert Jones, a brother in law of Rupert Murdoch, who lifted his stake in Range River gold from 9% to 12%.

One of the world's biggest fund managers, Fidelity Investments, took advantage of softer prices across the board to pick up some extra stock in Computershare, inching forward from 10.4% to 11% of the global share services company.

Ausbil Dexia, the high-growth fund led by Paul Xiradis, was also back in the market snapping up more stock in television company Seven Network. Ausbil Dexia increased its stake in Seven from 5% to 6.4%.

Meanwhile, the Select Funds Management group led by Chris Kelaher (who was interviewed on Eureka Report last week) surfaced as a substantial shareholder in Linq, the specialist resources fund.