Rich entrepreneurs lead the sharemarket charge

The sharemarket rally has convinced investors of all shapes and sizes to get back into equities, and the wealthiest entrepreneurs are leading the charge. In the last few months, we’ve seen investors including Computershare’s Chris Morris, property veteran John Gandal and the Smorgon Family take stakes in small and medium companies that are on the rise.

Their stock picks could provide some valuable clues about the hottest sectors – investments range from the mining sector to the online industry. Let’s have a look at the market moves of some of our wealthiest investors:

Alex Waislitz

Alex Waislitz is the son-in-law of the late Richard Pratt and runs the family’s investment company, Thorney Holdings. The company holds stakes in a large number of small and mid cap companies and is known as a vocal shareholder. The company has made a number of investments in recent months, building on its existing stake in some instances and buying new shares in others.

The big new investment is in Swick Mining, a small mining services business with a market capitalisation of around $75 million. Thorney spent around $5 million to build a stake of just over 5%. Since it bought in, Swick has announced two contract wins and the stock has risen almost 35%.

Thorney’s other big investment was in second-tier sharemarket operator NSX, which is seen as a potential competitor to ASX down the track. Waislitz spent around $1.5 million doubling his stake to just over 16%; since the purchase, the stock is flat.

In July, Thorney also increased its stake in Austin Engineering, shares in which have jumped 40% since Waislitz’s purchase.

John Gandel

In late May, retail and property billionaire John Gandel made a rare foray into the listed sector, investing $73 million for a 12.2% stake in the company and putting another $15 million into Charter Hall’s special distressed property fund. Gandel is now expected to invest a further $30 million in the company.

So far, it’s been a pretty good investment. Since late May, the stock has risen almost 47% from 37.5c to 55c.

Chris Morris

Computershare founder Chris Morris doesn’t mind dabbling in the odd investment outside his main area of focus: he owns property, a few pubs and last year he invested in and become chairman of listed Perth Company, Empire Beer Group.

In July, Morris spent just under $1 million buying 16.6 million shares in small web services company Webfirm, which is chaired by Hitwise founder and wealthy entrepreneur Andrew Barlow. Morris bought his shares at 6c and they’ve since risen to 8c – hardly anything to shout about, but at least the investment is headed in the right direction.

The Smorgon Family

Another family spreading its wings further into the technology sector is the Smorgon family. The Victor Smorgon Group, which is owned by the family of the late Victor Smorgon, who died earlier this year, holds investments in a number of different sectors.

It also backs an investment house called Co-Investor, which came to the rescue of beleaguered digital services group CommQuest in late June. Co-Investor injected $13 million into the group, in the form of $8 million worth of secured debt and a $5 million bridging facility. The stock is yet to resume trading after the deal.

The Darling Family

The Darling family are the major investors in Caledonia Investments, which manages around $2 billion for about 400 investors. The company is chaired by Michael Darling.

Twice in August Caledonia topped up its stake in Customers Limited, which owns an extensive network of automatic teller machines. Caledonia now holds around 8% of Customers, which also counts Peter Scanlon amongst its shareholders. Since Caledonia’s last top-up the stock is up around 7%.

Kerry Stokes

We couldn’t not mention the billionaire who has been doing the most buying this year. Kerry Stokes’ Seven Network has been spraying cash around everywhere, building impressive stakes in Consolidated Media, Telstra and Prime Media to go with the company’s shares in West Australian Newspapers and GRD (which is currently under takeover offer). Plenty of analysts don’t like the media sector right now, but Kerry certainly sees a long-term future.

Warren Buffett

It’s always worth checking in on the buying activity of everyone’s favourite stock picker, Warren Buffet, just to see what themes are emerging. His latest new investment was in Becton Dickinson & Co, which makes syringes and medical devices. Perhaps healthcare will be one of Buffett’s next big targets?