is w. h. sol patts a core hold?, page-5

Well maybe a holder should get in on the discussion. Yes its a core hold for me. However over the past 6 years that I have held it has had its moments from really great success to in the past few years lagging.

The reason for the hold - Its a gateway to a number of cyclical investments and presents around a 22% discount because of the structure. That is why annually Perpetual get on their back trying to unbundle it all and make a quick buck - in my opinion to bolster what I believe have been very mediocre results for them. They hold around 12% of this and BKW as far as I can recall.

There is a lot going on in the background of this company. BKW which has a counter hold in SOL and Sol in it - a defence against takeover set up many decades ago. BKW seems to have some of the best building products companies which are presently suffering but as all cycles do things will change. Competition in that sector is reducing production assets some are just closing so BKW's own business is gaining strength at this time if not profits which need a change in building activity.

SOL's direct large investment is NHC which has a bout a $1billion in cash. Coal is out of favour but they have invested in a coal to gas / liquids development plant and if that gets off the ground I can see a large pool of that cash disappearing and a rejuvenation of the coal assets. Included in their is a great port and coal terminal that delivers good profits. You should look at their presentations they are really cost effective operators. NHC has also recently gone into Bridgeport energy which is conventional oil and the own a strategic stake in Westside corp (CSG).

Then there are (SOL) stakes in TPG and API and a few more plus a bit of cash again. All in all they are long term players who have to date been very good stock pickers with long term big hits.

They have a track record , the cash to get the investment to profit and can take their time. Personally they keep me away from a lot of penny stocks that seem to be the lifeblood of HC fans.I know they are playing them for me and some have been named in a previous post so I am happy that they know more and have the cash to make the correct decisions. Much like RPW (ERM power) they own assets from gas , to CSG, to power stations to be the 4th largest retail supplier of electricity. You are buying a bag of goodies and they make sense when put together.

I have steadily increased my stake over the years and I am not disappointed in fact the GFC helped me as I felt they were overpriced before that. Today they are still under-priced IMO because the market sees them as coal , building products and boring.