Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (WHSP) could be considered the closest thing to Berkshire Hathaway available on the ASX. They are both large, diversified conglomerates with a focus on long-term investments in high-quality businesses. Listed in 1903, WHSP has never raised additional capital nor missed a dividend payment and is still run by descendants of the founding Pattinson family.
The exceptional performance of the business could be largely attributed to the stability and long-term vision provided by its history of ownership, similar to Berkshire Hathaway which has had Warren Buffett at the helm for over 40 years. Current Chairman Robert Millner is the fourth generation of the extended family to lead WHSP and has been a director of the company since 1984.
The company has a good track record of making profitable long-term investments. The market value of its listed equity investment portfolio was $4.3 billion at the start of 2015 and was acquired at a cost of $866.7 million. For new investment ideas, it would be wise for Fools to analyse the holdings of WHSP now and into the future.
Some of the WHSP’s current holdings worthy of further consideration include:
TPG Telecom Ltd (ASX: TPM) – This fast growing telecommunications company is aiming to become a dominant player in the industry with its acquisition of iiNet Limited (ASX: IIN) likely to be approved in the near future. The long-term growth outlook for the telecommunications sector remains strong with increasing volumes of data being required for an increasing array of technological uses.
Brickworks Limited (ASX: BKW) – Owner of some of the best known bricks-and-masonry brands in Australia, Brickworks also owns a 42% cross-holding in WHSP. Its main business lines of building products and land development result in company profit being subject to the property cycle, however, it’s holding in WHSP will smooth out returns during the tougher years.
Australian Pharmaceutical Industries Ltd (ASX: API) – One of Australia’s largest pharmaceutical wholesalers, API also operates the chain of Priceline stores and the original Soul Pattinson pharmacies. This business is rapidly expanding its store network and dividends are following suit.
Lindsay Australia Limited (ASX: LAU) – A company most people may not be familiar with, Lindsay is a transport and logistics group focused mainly on the food and agriculture industry. Increasing demand in Asia is expected to drive the growth of the Australian agriculture industry for decades to come. The increasing volume of produce coming from rural Australia will require transport to reach export locations.
WHSP’s history of investment performance provides additional merit to long-term investing in high-quality businesses and Foolish investors should pay attention to its investment decisions.
Warren Buffett is another advocate of this investment style.
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Motley Fool contributor Mitch Sonogan has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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