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%.