Institutional Accumulation of Fairfax Media Stock

By Kenneth Robson on February 4, 2013 • ( 0 )

Dexia Tower at night / Tour Dexia en soir / Dexiatoren (Photo credit: Wikipedia)

On the 30/01/13 boutique fund manager Ausbil Dexia announced that it had become a substantial holder with 124,545,606 shares and 5.3% voting power in Fairfax Media.

Ausbil Dexia

It was formed in 1997 as the Australian arm of Dexia Asset Management which manages $98 billion of funds for the Belgium Bank Dexia SA.

Ausbil Dexia manages about A$11 billion for major superannuation funds, institutional investors and master trust clients.

Its trading strategy depends on the premise that stock prices ultimately follow earnings and earning revisions. Their research is focused on finding companies most likely to grow earnings in the future, and not just on the current trading situations.

It has consistently been one of Australia’s best performing equity fund managers.

Other Leading Shareholders in Fairfax Media (Market Cap $1.26 billion)

Investsmart lists the major shareholders as:

Gina Rhinehart and Hancock Prospecting Pty Ltd with 14.99%
Allan Gray – 8.29%
Commonwealth Bank – 7.48%
AXA Group – 7.07%
NAB Group – 6.47%
Maple Brown – 5.8%
Lazard Asset Management – 5.09%
IOOF Holdings Ltd – 5.01%

Thus Gina Rinehart controls about 15% of stock, eight leading fund managers at least 50%, leaving about 35% in the hands of smaller shareholders, including retail investors.

With the leading shareholder Gina Rinehart denied board representation for fear of compromising editorial independence, and threatening a radical sale of assets, the share register is probably not stable. CEO Greg Hywood has now sold off redundant and poorly performing assets, and rationalized operations, for the company to be now almost debt free. This should boost future profits.