Just over 92 million shares traded hands on the ASX in the June quarter, about a million shares a day. We’ve looked through the churn to see what top-rated Morningstar fund managers bought and sold.

Australian fund managers typically report their largest holdings on a monthly or quarterly basis. We’ve compared those reports to see what’s changed in their portfolios between April and June.

We’ve included Australian equity managers with a Gold or Silver analyst rating, meaning they score highly on five key metrics: people, process, performance, parent and price. Funds that earn a Gold rating are those that analysts think are most likely to outperform over a full market cycle.

We’ve included those names covered by Morningstar and ranked them to how undervalued they are.

Buyout targets among the list

Silver-rated small-cap Australian equity fund Investors Mutual Future Leaders picked up Australian Pharmaceutical Industries (API) while sister fund Equity Income bought Spark Infrastructure (SKI) in April.

Both have been targeted by acquisitions this month.

Morningstar analysts are not fully sold on the offers. Analyst Shane Ponraj called the $687 offer for API from Wesfarmers “opportunistic”, saying it undervalues the company. Analyst Adrian Atkins called the rejected $5 billion plus bid for SKI from private equity giant KKR and the Ontario Teacher’s Pension Plan “mediocre”.

The moves follow Sydney Airport turning down a $22 billion offer as buyers circle infrastructure assets.

SKI is up 14 per cent and API 21 per cent since the announcements.

Turnover among the WAAAXs

Silver-rated large Australian equity fund Hyperion Australian Growth Companies has bumped up its stake in Afterpay (APT) even as it said goodbye to part of its holdings of Xero (XRO) and WiseTech (WTC).

Big changes in some overvalued names

Hyperion Australian Growth Companies made some big changes--greater than 5 per cent of the whole portfolio--for a handful of names Morningstar considers overvalued.

It bought a stake equivalent to 11.55 per cent of the portfolio in sleeping disorder treatment provider ResMed (RMD), which last closed at $33.40, a 76 per cent premium on the $19 Morningstar fair value.

It has also sold big stakes in Cochlear (COH) and Dominos Pizza Enterprise (DMP), both trading in the one-star range, meaning a significant premium to fair value.

The one fairly valued name picked up by the fund was CSL Ltd (CSL), which had its fair value increased 13 per cent yesterday after an upgrade to its potential for gross margin expansion. The Australian biotech giant closed Friday at $277.72, just above its new fair value estimate of $275