Soul Patts (ASX:SOL) share price hits record high amid copper spin-off rumours

A rumored spin-off of a metals subsidiary has sent Sol Patts to a new all-time high.

| More on:
active person star jumping amid city landscape

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price hit a new all-time high today. The record comes after the Australian Financial Review (AFR) reported the company was considering spinning off its copper-based subsidiary onto the ASX.

At the time of writing, shares in the investment house are down 1.05% trading at $37.83 after hitting an intraday and all-time high of $38.84.

Today's milestone for the Soul Patts share price comes amid a disappointing day on the market overall. The S&P/ASX 200 Index (ASX: XJO) is currently down a mammoth 1.97%.

Let's take a closer look at the news.

Soul Patts copper spin-off

According to the AFR report, which came after markets closed yesterday, Soul Patts is "advancing plans" for an initial public offering (IPO) of its wholly-owned subsidiary Round Oak Metals.

Round Oak is a predominately copper focused company with operating mines in Queensland and Western Australia, as well as non-operating growth projects in Victoria and Queensland.

Apparently, Soul Patts is planning to hold onto a large number of shares in the company, just like it does in Brickworks Limited (ASX: BKW) and New Hope Corporation Limited (ASX: NHC).

This comes amid a surging copper price – up 20.4% in 2021 so far. As of writing, the red metal is trading for US $4.24 per pound on the open market.

The website Trading Economics says constrained supply and increasing demand has seen the price of copper rise in recent months. One reason for rising copper demand is surging production in green technology. Copper is essential in the manufacture of such products.

In its half-year results, Soul Patts reported that Round Oak contributed about $12.8 million to the group's profits. In the prior corresponding period (pcp), the business lost $37.3 million.

The company advised that revenue was up 95% to $145.9 million, largely driven by higher sales volumes, strengthened commodity prices and improved zinc smelter treatment changes. The AFR says the company should make around $64 million for the full-year.

Soul Patts share price snapshot

Over the past 12 months, the Soul Patts share price has increased an astonishing 81.7%. That's 56 percentage points greater than the ASX 200. Year-to-date, Soul Patts' value has appreciated 25.1% – 15 percentage points better than the benchmark index.

Washington Soul Pattinson has a market capitalisation of approximately $9.2 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Industrials Shares

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Industrials Shares

Up 20% this year, does Macquarie rate Downer shares a buy, hold or sell?

Here’s the broker’s latest stance on the stock.

Read more »

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Industrials Shares

How much upside does Macquarie expect for Auckland International Airport shares?

The airport recently lowered its fees for airlines.

Read more »

a happy plumber smiles while repairing bathroom fittings in a home.
Industrials Shares

After crashing 17% last Friday, does Macquarie rate Reece shares a buy?

Should investors buy in the dip?

Read more »

Piggybank with an army helmet and a drone next to it, symbolising a rising DroneShield share price.
Industrials Shares

5 ASX defence shares that have surged 40% to 307% in just one year

Analysts say the defence investment theme should not be ignored.

Read more »

A middle aged man holds a plumbing plunger in one hand and a piece of toilet pipe in the other with an exasperated look on his face.
Industrials Shares

Guess which ASX 200 industrials stock is sinking today on latest trading update

Softening market conditions see investors head for the door.

Read more »

American soldier in military uniform using laptop for drone controlling.
Industrials Shares

Why this soaring ASX defence stock could rise 17%

Bell Potter has good things to say about this growing company.

Read more »

American soldier in military uniform using laptop for drone controlling.
Share Market News

ASX defence shares lift amid NATO Summit decision to turbocharge spending to 5% GDP

The North Atlantic Treaty Organization (NATO) has also signed a 'milestone' agreement with Australia.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Industrials Shares

Following its investor day, does Macquarie rate Fletcher Building shares a buy, hold or sell?

The New Zealand-based building and construction company updated its loss forecast at its investor day on 24 June.

Read more »