Jerry Gogol: No fear of screwing this one up, eh? Well let's see:
The company is controlled by a wheeler-dealer or maybe his kids. The courts will decide or have already determined. But there is no family peace, so maybe the situation isn't quite yet resolved. In any case,their interest is not necessarily in maintaining the interest of the individual shareholders. For example, if The Man or The Kid who wrestles control decides to make an acquisition to diversify... like causing TIMT to buy land that they (the family) personally own, or buying a software company that they like, etc. etc.
You ever been to Kazakhstan? Well TIMT has an agreement with a Belgian co. to buy a huge amount of sponge from Kazakhstan. A 10-year contract. Fixed price for 5 years. What do you picture could happen in Kazakhstan -- I see AK47 style renegotiation, shipments held hostage, unstable government, etc. etc. Especially if TIMT gets to be viewed as a very,very profitable company that its suppliers think ought to renegotiate in the interests of "fairness".
Now let's look at Boeing. Tough, tough bunch when it comes to quality. About two screw-ups in shipments by any of a number of chemists, mill hands, transporters, etc. or ANY failure to meet Boeings performance requirements ...well, a competitor is readily at hand to pick up TIMT's "modified" contract.
And how about potential competitors. One announcement from Asarco, Newmont, Cypress-Amax, or the Belgium co., that gee, since copper, aluminum, etc. smelting and refining business is down and so, with the excess capacity, and in the interests of serving all customers and diversification they are going to enter TIMT's market... just that announcement... you don't think that perhaps some of us might sell TIMT assuming that there will be too many people chasing the titanium customers?
Ah well. It's always this way in bull markets I guess. The guys with not too much experience have no fear, and the battle veterans are so cautious. JMO, and I am long TIMT. Paul Senior |
