SOL is up +25% year-to-date, but last month saw the stock spike lower after the conglomerate reported a 9% drop in “regular profit”. At the same time, they interestingly announced the reallocation of almost $1bn away equities over the past year – the investment business now has over $900mn in cash, up more than 87% from the previous year. As we touched on earlier they are earning ~5% pa on this cash while they search for better opportunities, this return aids patience. We like SOL’s performance, which has been excellent over the years. Also, their cash/flexibility is attractive in today’s uncertain market, but the stock isn’t cheap, in our opinion.
- We can see SOL breaking above its 2023 high, but we would be reticent to chase such a move on valuation grounds.
MM is short-term bullish on SOL
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