Buying the dip: Managers spend millions on Soul Patts shares

A group of happy office workers throw papers in the air and cheer.

April just passed wasn’t so great for the Washington H. Soul Pattinson and Co Ltd (ASX: SOL) share price. It’s fair to say Soul Patts shares had a month to forget, dropping almost 3% over April.

Yep, this ASX 200 investing conglomerate started last month at $33.61 a share but closed up shop yesterday at just $32.67. That’s a fall worth 2.8%.

That probably won’t come as welcome news for shareholders. But it’s nothing new for this company. Soul Patts has had a pretty rough time for a while now. The company is up just 0.4% over the past 12 months, and remains down by 3.1% over 2024 to date. Soul Patts has even retreated a hefty 2.27% during today’s trading thus far.

But while some investors are clearly selling out of their Soul Patts stock, many of those shares have found a welcoming new home. That home would be the brokerage accounts of several members of Soul Patts’ senior management.

Insiders have made a flurry of buys over the month of April, according to ASX filings.

Investors usually like to see members of their companies’ management teams loading up on shares, as it demonstrates an alignment of their financial interests with those of the shareholders who are paying them to run their company.

Conversely, shareholders don’t normally like to see the opposite situation occur when management sells out of their shares.

Luckily for Soul Patts investors, the former scenario applies in this case. Let’s dig in.

Insiders spend up big on Soul Patts shares

So April saw a flurry of insider buys for Soul Patts shares.

Firstly, there was the ~$20,000 indirect buy from non-executive director Joanne Pollard. Pollard picked up 600 shares in an on-market buy on 3 April. Not too significant. But it gets better.

Between 2 and 4 April, ASX filings show Soul Patts chair Robert Millner purchased a total of 520,000  shares in a series of on-market buys through two indirect private companies. These buys add up to a total investment of $17.59 million.

Millner was at it again on 9 April, picking up another 90,000 shares for just over $3 million.

Then, on 16 April, another purchase was made by CEO Todd Barlow. Barlow bought up 1,907 Soul Patts shares on that date. Saying that, this buy was only executed due to Barlow being ineligible to purchase additional shares due to a company blackout when the company’s last dividend of 2023 was paid out in December.

Finally, another director – Josephine Sukkar – purchased 15,034 Soul Patts shares on 18 April. This was done for a cost of just over $500,000 through a self-managed superannuation fund.

Foolish takeaway

As we discussed earlier, shareholders will undoubtedly appreciate these buys, particularly the huge top-up made by chair Robert Millner.

It shows a significant investment in the company’s future by its management and may even signal to investors that these insiders view Soul Patts’ pricing over April as cheap.

But only time will tell if these buys prove to be savvy.

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Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.