Why is the Washington H. Soul Pattinson (ASX:SOL) share price struggling in November?

What's up with Soul Patts shares lately?

| More on:
Man struggles to work in dark room at computer, puts head in hand

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

sdf

The S&P/ASX 200 Index (ASX: XJO) has had a pretty successful November thus far (touch wood). Since Friday 29 October, the ASX 200 has put on a healthy 1.7% or so, including the 0.24% the index lost today. But one ASX 200 share hasn't quite kept up with this success. That would be the Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), more commonly known as 'Soul Patts'.

The Soul Patts share price has gone backwards over November so far. This industrials company closed at a share price of $32.48 a share back on 29 October. But today, Soul Patts closed at $31.90, down 0.96%. That translates into a loss of 1.79% for November thus far, underperforming the ASX 200 over the same period.

This might be a bit of a let-down for investors. It was only back in late September that Soul Patts was hitting new all-time highs, topping out at $40.80 a share on 28 September. As of today, Soul Patts shares are now down close to 20% from that high watermark.

So what's behind Soul Patts' underperformance in November so far?

Why has the Washington H. Soul Pattinson share price had such a disappointing November so far?

Well, to answer that, let's examine how Soul Patts is structured. So unlike most ASX shares, Soul Patts functions more like a Listed Investment Company (LIC) than a customer-facing business. It still operates the chain of pharmacies it is perhaps most publically well-known for. However most of its business these days revolves around its large investment portfolio.

Soul Patts owns large swathes of a number of other ASX shares. These include Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG) and New Hope Corporation Limited (ASX: NHC). It also recently acquired the old LIC Milton Corporation, which also had a large portfolio of ASX shares that Soul Patts now owns.

These underlying holdings might give us some idea of why the Soul Patts share price has been struggling in November thus far.

New Hope has been the worst performing investment for Soul Patts in recent months, having lost around 24% of its value in the past month alone. This has undoubtedly not been helping Soul Patts out in recent weeks. However, it's the TPG share price that might have ensured Soul Patts kicked off November on the wrong foot. Since the start of the month, TPG shares have lost close to 6% of their value. Brickworks shares wouldn't have been helping either – they've lost close to 2% over the same period.

So that's the most likely reason behind Soul Patt's laggardly performance over November so far. And investors might have some more share price pain in the weeks ahead too. Soul Patts is scheduled to trade ex-dividend for its upcoming final dividend on 19 November – so investors should probably expect another sip then too. Of course, the 36 cents per share dividend that will arrive on 14 December will help ease the pain!

At the current Washington H. Soul Pattinson share price, this compnay has a market capitalisation of $11.51 billion with a dividend yield of 1.91%.

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom 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

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

Are ASX defence shares the next big opportunity?

Many analysts at Sydney's ASX Investor Day spoke of defence as an emerging global investment theme.

Read more »

Army man and woman on digital devices.
Industrials Shares

ASX defence stock jumps 10% on US army order

Let's see what is getting investors excited on Wednesday.

Read more »

US navy ship sailing along at sunset.
Industrials Shares

Austal share price smashes new record high as takeover rumours swirl again

Investors were buying up shares in this Australian global defence shipbuilder today.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why Macquarie expects this ASX 200 dividend stock to keep outperforming

Macquarie has tipped this ASX 200 dividend stock to outperform. Let’s find out why.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Mergers & Acquisitions

Why are Brickworks shares up 18% today?

Let's find out what is getting investors excited this morning.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Industrials Shares

Key takeaways from ALS shares results according to Macquarie

ALS announced an underlying net profit after tax (NPAT) of $312 million this week.

Read more »

A woman sits crossed legged on seats at an airport holding her ticket and smiling.
Industrials Shares

What does Macquarie think Auckland International Airport shares are worth?

Is it time to invest in this unique holding?

Read more »