The financial year just gone wasn't a particularly kind one to ASX shares and investors. Over FY 2022, the S&P/ASX 200 Index (ASX: XJO) dropped by a meaningful 10.19%. It wasn't much better for the Washington H. Soul Pattinson and Co Ltd (ASX: SOL) share price. In fact, it was worse.
Soul Patts shares started the financial year at $33.73 each. But by 30 June last month, the industrial conglomerate finished up at just $23.54. That's a drop of just over 30%, almost triple the losses of the ASX 200. Ouch.
But now that nasty year is out of the way, and we are well into FY 2023, what might the next 12 months hold in store for Soul Patts shares?
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What will guide the Soul Patts share price in FY 2023?
Well, it's hard to predict the movements of any ASX share, whether that be over a day, week, month or year. But it's arguably even harder to assess what could happen to this particular company.
That's because most of its value comes from the large share portfolio that the company holds within it – a share portfolio made up of dozens of other ASX shares.
Until October last year, Soul Patts only owned a relatively small number of ASX portfolio holdings, as well as some unlisted assets. These include positions in Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), BKI Investment Company Ltd (ASX: BKI), and TPG Telecom Ltd (ASX: TPG).
But in October, Soul Patts acquired the listed investment company (LIC) Milton Corporation. Milton already had a large portfolio of mostly ASX blue-chip shares, which is of course now owned by Soul Patts.
Almost half of the Soul Patts investment portfolio is still concentrated on its 'strategic portfolio', which includes the stakes in the companies listed above, but excludes the shares inherited from Milton.
So going into this financial year, it's a fair bet that the Soul Patts share price will be guided by what happens to its largest holdings – mainly Brickworks, New Hope, and TPG.
If the entire ASX does well, it's likely to lift up the Soul Patts share price even further, given the company still owns Milton's ASX 200-aligned cache of shares.
But if you're itching to watch how Soul Patts shares navigate the current financial year, make sure to keep an eye on those three companies.
