Welcome to 2026.

I missed last week's newsletter because I've been rewriting the project from the ground up. There's complexity here, so if you want to skip to the methodology, scroll to "The Engine."

The thesis: Context changes everything. A capital raise announcement means nothing without knowing the company's “state” and state trajectory. A fund filing means nothing without knowing their track record. Capital Signal is now built to have memory and track both as well as the behaviors of funds and directors. I got into detail about this in the methodology section.

I am currently tracking around 500 companies. If you want to make sure a ticker(s) you like is tracked reach out to me and I’ll be sure to include it.

BlueScope Steel (BSL) rejected a $30/share offer from SGH Limited and Steel Dynamics on January 7th a 27% premium.

The next day, AustralianSuper increased their stake to 13.5%.

The state trajectory tells the story:

Three years of declining results. This is a cyclical steel company at the bottom of its cycle. The funds know this and they're betting the bid comes back.

The holder accumulation:

AustralianSuper has been accumulating for 12 months through negative state results. L1 Capital entered in September. The bid arrived in January. When it was rejected, AustralianSuper increased the next day.

Why it matters: AustralianSuper has a 63% win rate across 100 signals in our dataset. L1 Capital runs at 60% across 53 signals. When both are accumulating into a rejected bid, they're betting on a sweetened offer.

The pattern: Active investors buying rejected bids has preceded sweetened offers in 4 of 6 cases we've tracked.

BSL (BlueScope Steel) | AustralianSuper | INCREASE | 13.5%

LYC (Lynas Rare Earths) | AustralianSuper | INCREASE | 9.4%

KGD (Kula Gold) | Forrestania Resources | INCREASE | 85.8%

CWY (Cleanaway) | Host-Plus | INCREASE | 6.0%

WAM (WAM Capital) | Wilson Asset Management | ENTRY | 5.5%

WAF (West African Resources) Mitsubishi UFJ + First Sentier both out same week

This one is unusual. Look at the timeline:

They entered and exited within 2-3 days. That's not normal portfolio rebalancing.

State context: WAF is a gold miner in Burkina Faso. Four consecutive NEGATIVE results. Production guidance declining: 220k oz → 210k oz → 190k oz. The company keeps missing its own targets.

The signal: When two major institutional holders enter and immediately reverse course, something changed their thesis. Watch this one.

HUB (HUB24) | First Sentier | EXIT

IRE (IRESS) | NORGES BANK | EXIT

BSL (BlueScope) | REJECTED | SGH/Steel Dynamics | $30.00

KGD (Kula Gold) | COMPULSORY ACQUISITION | Forrestania Resources | 85.8%

MFD (Mayfield) | LAUNCHED | Embark Early Education | $0.50

Currently I've processed 509 companies over the last 5 years with 62,000 announcements extracted and classified. The project is expensive to run so I'll keep it around this number and expand to full ASX (1,800 companies) if it gains traction.

I parse management commentary to extract guidance changes, trading updates, capital raise purposes, headwinds and tailwinds. Each gets classified and tracked over time. 3,669 state events so far.

The individual labels matter less than the trajectory.

An investment fund that got caught in 2022 and never recovered:

Four consecutive years of STRONG_NEGATIVE results, each worse than the last. Then the institutional holders bail within weeks of each other.

A retailer that looked great until it didn't:

Revenue growth: +30% → +2.75% → -34%. The state extraction caught each turn.

A capital raise for "exciting new developments" reads very differently when the state trajectory shows NEGATIVE → NEGATIVE → STRONG_NEGATIVE.

Backtesting across 5 years of data has revealed some interesting trends.

When multiple funds take new positions in the same stock within 30 days, subsequent returns are significantly higher.

Translation: When 6+ funds pile into the same stock, they're usually right. 64-86% of the time, the stock is higher 30 days later.

Example: KAR (Karoon Energy), July 2022: 12 funds entered within 30 days. Stock went from $1.88 to $2.23 (+18%) over the next 6 weeks.

Current pile-ins to watch:

PRN (Perenti), May 2022: 7 funds entered within 30 days Mitsubishi UFJ, First Sentier, Allan Gray. Stock dropped 14.5% over the next month.

What happened? May 2022 was when the market corrected. Macro overwhelmed the signal. The funds weren't wrong about the company (300%+ rally since), but timing matters or at least if you want to make a quick trade it does.

When these funds file an ENTRY or INCREASE, what happens 30 days later?

Soul Patts is the steady hand (-6% to +14% range). Regal swings big (-55% to +63%). AustralianSuper has the most data points.

The same players appear across multiple situations.

Some directors keep appearing at companies that get acquired. I tracked premium bids (>20%) and looked at who was on the board.

Nora Scheinkestel was on Telstra, then joined Origin Energy in March 2022. In November 2022, Brookfield bid 55% premium for Origin. She then joined Qantas in February 2024 a company that's had scheme activity.

Denise McComish was on Macmahon (MAH) when it received an 82% premium scheme in 2024. Was on Mineral Resources (MIN) during its 33% premium takeover activity in 2022-23. Now sits on Alkane Resources (ALK) which announced a scheme in April 2025.

State trajectory:

Holder behavior (within 4 weeks of state change):

M&A event:

After the rejection: The funds kept accumulating. Current positions:

State went STRONG_POSITIVE → NEGATIVE. Multiple funds piled in. A takeover bid arrived. The bid was rejected, but funds now control 50%+ of the register. They're betting it comes back.

There is much to build out in terms of data and as much to backtest. From here on out I’ll be exploring the different signals and relationships between them. Some things coming up include

This is not financial advice. Do your own research.

As always if you want to reach out feel free to contact me on linkedin or twitter.

Questions? Reply to this email.

Cheers

Damon