Washington H. Soul Pattinson and Co Ltd (ASX: SOL) shares are surging today and have just hit a new 52-week high. The Soul Patts share price has been on a tear over the past week, rising 9.4% from around $23.30 last Friday to $25.48 today at the time of writing. Earlier today, Soul Patts shares hit their new high of $25.49, a level not seen since April 2019. It's been a slow but steady rise for the company in recent weeks too. Soul Patts shares are also up more than 21% over the past month and more than 46% over the past 6 months.
So what's behind this extraordinary rally?
What does Washington H. Soul Pattinson do?
Soul Patts is a pretty special company. It has a rather unusual structure, functioning more as a listed investment company (LIC) today than its original structure as a pharmacy chain (although it still maintains its pharmacies). As such, it owns large stakes in a diversified portfolio of ASX companies.
Some of its top holdings are as follows:
- a 25.3% stake in TPG Telecom Ltd (ASX: TPG)
- a 43.9% stake in Brickworks Limited (ASX: BKW)
- a 50% share of New Hope Corporation Limited (ASX: NHC)
- a 19.3% stake in Australian Pharmaceutical Industries Ltd (ASX: API)
- an 8.6% share of BKI Investment Co Ltd (ASX: BKI)
- a 22.6% stake in Clover Corporation Limited (ASX: CLV)
In addition to these positions, Soul Patts also owns a portfolio of unlisted assets. These range from a mining company to a corporate advisory firm.
Why is the Soul Patts share price at a new 52-week high?
It's not immediately clear what has triggered the surge in the share price this week to a new 52-week high. Just yesterday, however, the company did tell the markets that two of its directors have picked up additional shares. Thomas Millner reportedly picked up an additional 40,000 shares between 30 September and 5 October, while Robert Millner picked up 45,000 shares over the same period. This obviously tells us that the directors are bullish on their company at the current share price and are willing to put their money where their mouths are, so to speak.
Additionally, some of the shares in Soul Patts' portfolio have also been rising in value in recent weeks, helping to increase the value of the company's holdings. These include New Hope, which is up nearly 13% in the past month, and Brickworks, up 11.5%.
All of these factors combined are, in my view, what is behind this new 52-week high for Soul Patts shares.
