Here is yet another reminder why small, individual investors should not be spending their time and savings on buying individual stocks. The savvy pros always manage to find some sort of advantage.

Case in point: California-based activist investor Relational Investors, co-founded by Ralph Whitworth and David Batchelder, has identified its newest target — Dallas-based Flowserve Corp.

The activist investment firm earlier this week filed a 13D disclosing it owned more than 3 million shares, or 5.65 percent, of Flowserve’s total shares outstanding. It also simultaneously filed a delayed 13F disclosing it owned more than 238,000 shares at the end of the first quarter. Flowserve, which has a $6 billion market capitalization, makes industrial pumps, valves and other equipment for the chemical, oil and gas and power industries.

Keep in mind that the deadline for the March 2012 13F was around May 15. So, it took about a 40-day extension. Investors can obtain an extension for the filing if they feel it could be hurt by the disclosure. Under SEC rules, investors can seek "confidential treatment" in certain limited circumstances for an ongoing investment strategy, including an ongoing program of acquisition or disposition. “It is not unusual for us to request confidential treatment while in an accumulation program,” Whitworth said in a phone interview.

So, thanks to this provision, the $6 billion Relational wound up accumulating most of its Flowserve position since the end of the first quarter, but chose not to disclose its earlier, much smaller position until it passed the magic 5 percent threshold required to file the 13D. This presumably gave the company more time to pick up a lot of stock without tipping off other investors.

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