Quote:
Originally Posted by ofoegbu
I am happy to have a discussion with you on Transcorp being a "money spinner" and why you have that view. However, since 2005 when this idea was first floated, I for one never, ever bought in to it and I told anyone who cared to listen then. And the reason is fairly simple - the world is moving away from the model on which the whole concept of Transcorp is built on. In today's world of increased specialisation, lean, mean and nimble organisations, business at the speed of thought etc- how can one company expect to create significant value to shareholder by doing business in industries as diverse and different as tourism, telecoms, movie, oil & gas, education, mining, etc - all at the same time and expect to do better that companies whose 24/7 concentration is in just one industry and sometimes in just one sector in an industry.
IMHO, I do not see how Transcorp can deliver more value to a shareholder than, say, MTN or even Starcomms from the telecoms industry. Ditto for Oando or Total in oil & gas, Ikeja Hotel Holdings in tourism - especially when these niche players have best-in-class management team and Transcorp cannot even keep a management team for 1 year! Look at GE in the US, Daewoo in Korea etc - people have been calling for such companies to be broken up and Daewoo has already been broken up. GE was trading at $24/25 in 2003. Five years later it is trading at $33, an approximately 40% growth over 5 years. Compare that with S&P 500 that has done 65% over the same period. In other words, people who own GE are taking on more risk (since S&P 500 is more diversed than GE) and getting less return! And this is despite the fact that Jack Welch spent years building GE management through one of the best management programs in the world. If you think the folks at Transcorp can even come close to replicating GE's performance, than I have a continent to sell to you!
That is my problem with the whole concept - companies should stay in one industry and create value in that industry and leave it up to the investors / shareholders to diversify their investments across industries. Anything else is a recipe for chaos...
Just my 2 kobo worth of opinon ...
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I agree with u. The era of jack of all trade is over. If Transcorp can just stick to the hotel business they will be better off.
It will take a long time for Transcorp to get to N7.5 which was the PO price. In the meantime one would have made a lot more money in the likes of Zenith,
GTB etc. There far better opportunities at less risk out there than transcorp. We should avoid emotions when investing.
The simple fact that they have not released any quarterly result since the listing last year means i cannot go near it. Any analysis rght now is just guess work. Nobody oustide Transcorp knows the true financial health of the company.