4 ASX stocks that Australian Ethical bought or sold recently

Nick Sundich Nick Sundich, March 14, 2024

We often like to look at shares that well known ASX fund managers are trading, and today we’re looking at a few stocks that Australian Ethical bought or sold recently.

Australian Ethical (ASX:AEF) is one of the best known money managers in Australia with nearly $10bn in FUM and one of the most consistent performers so far as returns are concerned. Unlike many fund managers, it is publicly listed and so it has to disclose when it reaches the 5% substantial shareholder threshold and then where there is >1% change in its stake so long as it is above 5%. Here are a few companies Australian Ethical has traded recently, judging by recently lodged substantial holder notices.

 

4 ASX stocks that Australian Ethical bought or sold recently

Australian Clinical Labs (ASX:ACL)

Australian Ethical first crossed the threshold last October and bought over 2.2m shares over the summer to reach 6.1% by mid-February. ACL is a pathology stock that has faced two overriding issues. First, temporarily inflated revenues due to COVID-19 testing and seeing them go back to normal. Second, spending so much time and effort to snap up Healius (ASX:HLS) only for regulators to block the deal.

Nevertheless, ACL is still a $500m company, the clear second largest player behind Sonic Healthcare and is in a better financial and strategic position than Healius – ACL would arguably never had gone for Healius but for its depleted state. ACL has told investor that it is expecting EBIT of $60-65m in FY24.

 

3P Learning (ASX:3PL)

This company also saw increased investor attention due to pandemic restrictions – it is an ‘Edtech’ company that offers teaching software including Mathletics. Although it did not actually see a spike in revenue during the pandemic (i.e. FY21 revenue was only 4% higher than FY20), it has continued slow and steady growth post-pandemic. For FY24, it is expecting $112-115m in revenue and $13-15m EBITDA.

A substantial holder notice lodged by Australian Ethical shows it held a firm stake for 2 years before selling over 3m shares in the past few months, cutting its stake from 9% to 7.8%.

 

OFX (ASX:OFX)

OFX is a forex provider that Australian Ethical ended 2023 owning 8.7% of, after buying 2.5m shares in the last four months. It is a global company, with a particular focus on the higher margin corporate market and has endured good times since hiring CEO Skander Malcolm over 7 years ago, following a few years’ of stagnation.

It turned over nearly A$20bn in 1HY24 alone and had 84% of its revenue recurring. Its shares have been under pressure in recent months due to lower corporate confidence, particularly in the US. Nonetheless Australian Ethical seems to believe OFX’s word that the second half of the year will be stronger than the first and inevitably hopes to profit if this thesis comes true.

 

Healia (ASX:HLI)

Haven’t heard of this company? You actually have before, but forgot about it given its name change. Healia used to be known as Genworth, named after a US company it was affiliated with as a shareholder and commercial partner.

The pair agreed to break up, although the Aussie company had to ditch the Genworth name, and it did so with shareholders’ consent not long after the split.

‘Helia, inspired by the sun, reflects who we are and how we use our expertise, experience, and understanding to show people possibilities, shine a light on solutions, and create brighter outcomes,’ CEO Pauline Blight-Johnston said at the time.

Australian Ethical opted to sell enough of its shares to fall below 5%, selling over 7m shares between October 2022 and December 2023, before going below 5% shortly therafter.

 

 

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