By New Capital:
I first wrote about TGS-NOPEC (OTC:TGSNF) in the beginning of 2014 when it was trading at c. 160NOK. Since then the share price has been volatile – reaching 210NOK in June and the falling to 150NOK currently. As the company now trades at similar levels where I have bought it, in this article I will reexamine my investment thesis and cover the main recent events.
As a side note, I have recently read a book "Strategic Logic" by Carlos Jarillo and it made me think about TGS and its positioning in the market. The author advocates the strategy of finding and focusing on the core activity that is protected by entry barriers and that generates excess profits on the employed capital. TGS seems to have done exactly that by engaging in a single line of business and outsourcing the rest of the far less profitable supporting operations. Its largest competitors