Brickworks is a conglomerate consisting of building product manufacturing operations, property management, and a cross-shareholding in ASX-listed investment firm, Washington H. Soul Pattinson & Company, or Soul Patts.
BKW is trading within a range we consider fairly valued.
Price
A$26.31
Fair Value
A$69.00
Uncertainty
Medium
1-Star Price
A$52.49
5-Star Price
A$26.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say
Bulls
State and federal government policy to increase supply of Australian housing over the coming years supports near-term demand for brick volumes.
Bears
Brick use is expected to decline due to a greater range of alternative building materials, smaller house sizes, and a change in design preferences and building types.
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Brickworks is a conglomerate consisting of brickmaking operations, industrial property management, and a cross-shareholding in investment firm, Washington H. Soul Pattinson, or Soul Patts (ASX: SOL). Brickworks’ operating business manufactures brick products for the Australian and North American markets. However, most earnings are from the property and investment segments. The property segment principally redevelops warehouses on industrial land, with joint venture partner narrow-moat Goodman Group. The investment segment represents a cross-shareholding in Soul Patts, an investment firm with a portfolio encompassing diversified investments, including large holdings in no-moat coal miner New Hope and narrow-moat TPG Telecom.