Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi, I made a nice profit like you guys in WHC and also I had NHC and felt good selling at around 3.00 bucks , only to see it go to $5.00 I have some SOL and BKW so I can sleep at night thinking I have some coal exposure still , But I am surprised to see BKW down and SOL so my Question is why ?.....they own a big chunk of NHC is it so small of their total portfolio ? ....is this a buying opportunity and if so SOL OR BKW ? Many thanks Glenn
Hi Glenn,
Firstly lets look at Soul Patts (SOL) and Brickworks (BKW) individually:
SOL $25.78 : They own a number of strategic holdings including TPG Telecom (TPG) ~$1.1bn, Brickworks (BKW) ~$1.3bn and New Hope Corpn (NH) ~$1.68bn. Considering the significant outperformance by NHC I would have expected more from SOL.
We like investment house SOL below $26 and its recently found itself on our Hitlist.
BKW $20.34 : This manufacturer of clay and building products also owns ~26% of SOL which by definition equates to a $400mn position in NHC. Obviously BKW has struggled a bit due the slowing building industry but NHC has helped the cause.
We also like BKW into weakness under $20, similar to our view towards JHX into new lows sub $29.
Overall some slightly messy cross ownership but both stocks do look good value into further weakness.
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