Post by mrmoribundon May 18, 2022 5:29pm
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Post# 34693773
Thoughts on TLA's future
Thoughts on TLA's futureHaving $13 million in cash sitting on your balance sheet is very nice, I suppose, when times are tough, as they were not long ago.
That said, it's arguably not a great long-term plan if the objective is to do good things for shareholder value.
I've talked about the possibility of a coming-together with TransRail Innovations. And there already seems to be a kind of cozying-up going on.
The problem--potentially--with going that route is that both companies could be seen as largely tied to the same cycle. I suppose TransRail could be seen as a little bit less at the mercy of oil prices and oil industry activity.
A better future might be found in using some of the $13 million to go entirely outside the field of oil, or even outside energy more generally.
A company to look at for inspiration in this regard would be Circa Enterprises--which is currently showing that small Alberta companies can do great things without having their success hanging on the price of oil.
Circa is sort of a cousin of Titan Logix because it's run (and substantially owned) by roughly the same crowd of people. But Circa has done a good job of putting together, through acquisitions, a profitable mish-mash of businesses in electronics and metal bending.
Could Titan Logix profitably start down the same path? I admit it's a bit scary to go charging into an entirely new area.
Not sure.
One interesting idea--Circa and Titan merge. Circa is growing and could probably use Titan's cash. It seems to have a good protocol in place of making little acquisitions that work. But also, there's reason to expect that Circa's industrial ups would tend to offset Titan's oil biz downs--and the reverse.
If they could combine to make something that is less cyclical than both currently are then that would surely be a good thing. Also, they both currently suffer from the problem of being tiny. Even together they would still be pretty tiny, though less so.
Might not be easy to find a relative valuation that would make everyone happy--at least anytime soon. Titan shareholders would likely not want to see the gains from the current tanker truck upswing being shared with someone else. And they've been waiting a long time.
On the other hand, it's not like Circa isn't doing some pretty interesting things right now also.
Maybe Nick's got something even better up his sleeve. But I can't imagine the bosses at TLA being entirely happy with the idea of being tied to the ups and downs of the tank-level market for the rest of eternity. Or happy with sitting on $13 million in cash ad nauseum.