Forum Archive Index - October 2000

["Talacek, Philip " <pjt57@elec.canterbury.ac.nz>]

I don't like TRH either.  As mentioned their on going required capital
spending is massive, hence despite an often seemingly attractive price based
on P/E, the reality is one can never get that much cash out of them as they
are always having to invest it.  Lets not forget a large unionised (almost
militant in some cases) work force, with an uncertain future environment
with respect to labour relations (please this isn't a dig to start a debate
on the merits of the ERA).  I think their current management are clearly
trying to address these problems, I don't know how much success they will
have.  I think one problem is that the government still see the railroad as
a vital piece of infrastructure and hence has a right to meddle.  The
feeling I get though is rail is increasing irrelevant and just one of many
viable options, hence TRH's crappy results the last few years.  I struggle
to think of a worse situation than operating in a competitive environment
with the government second guessing your every move accusing you of acting
against the national interest.

Philip Talacek

Dsic No TRH

> -----Original Message-----
> From: Krypt Or [SMTP:kryptz@hotmail.com]
> Sent: Friday, 13 October 2000 20:18
> To:   sharechat@sharechat.co.nz
> Subject:      [sharechat] Re - Focused Portfolio & TRH
> 
> 
> Personally I think Tranz Rail are an appalling choice for such a
> portfolio.
> 
> What have they got going for them?
> - With NZ having a population of only 3.5M there isn't the density to 
> support a strong profitable railroads company.
> - Total lack of monopoly - trucks and shipping provide full competition
> with 
> the added advantage that trucks can go anywhere.
> - Huge assett base(/requirement) is actually a disadvantage (sorry you 
> people who like a high NTA), this means ongoing maintenance and upgrade 
> costs eat very nicely into earnings thank you very much.
> 
> IMHO of course.
> 
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