“Great by Choice” seems to be the most recent book (2011) from management “guru” Jim Collins. Similar to “Built to last” he focuses on companies that have achieved great success. However in “Great by Choice” he includes a certain twist: He looks at 8 pairs of competing companies which more or less had the same starting point, but where one of them became super successful and the other not.
He then tries to work out why the successful ones were successful. The pairs are as follows:
This is part 2 of the Flight Centre analysis after the book review last week.
The “old” business model
The Australian based company is a classic “travel agency”, both, running physical agencies as well as offering airline tickets and tours over web sites.
A traditional travel agency usually works like this: They offer flights from preferred airline partners and hotels or packages also mostly from certain partner companies. Traditionally you would go into a travel agency and ask if they can recommend you a destination, then you would be offered some colorful catalogues where they list the offered hotels (with prices mostly depending on the official “star system”) and then gladly sell you the “Bundle”.
Flight Centre, the Australian based travel company is a company which is on 2 to do lists of mine: The Australian list as well the travel series list. By chance I discovered that there is a book about Flight Centre. I decided to kick-off the analysis with this book review as part 1 of a Flight Centre analysis.
The book covers the complete story of Flight Centre and its founders from the start in 1973 until 2013 and was written by an “insider”, a former employee who worked as head of the UK operations.
Disclaimer: This is not investment advice. please do your own research !!!
Stada is a company I had been looking at many times in the past. A business which in principle is quite good (Generics and OTC drugs) but the company was run by a long time CEO who acted as it was his own company without owning a single share. He paid himself huge salaries, employed his son in a non-sensical but highly paid job, the company afforded itself a huge corporate center and so on. As a result, the company created little to no shareholder value in the 10 years up to mid 2016. As a comparison, the 10 year return of Stada until 03/2016 was only around 1,8% p.a. compared to 7,5 % p.a. for the MSCI Europe health care index, a significant underperformance.
Then however something happened which is still very rare in Germany: A local activist investor (Active Ownership Capital) and some other funds acquired a significant stake in the company and pushed for change.
Already a couple of weeks ago, Handelsbanken issued their 2016 annual report. On the surface, the numbers look like a small disappointment with flat profit and a slight decrease in EPS.
Behind the surface however, some things happened. The CEO was fired in 2016 for “too much centralization”.
Some highlights of the annual report from my side:
- the number of branches in Sweden went down from 474 to 435
- the 4th quarter was very weak, but most likely driven by cost for branch closures in Sweden which happened in Q4. I liked this comment:
Langfrist hosts a new interesting fund: Rubicon Stock Picker fund with their first 2016 annual letter describing their 3 largest positions in some detail (Eurotech, Max21, Songa Bulk)
Good collection of 2016 year end fund letters (Reddit)
Is there a huge fashion retail bubble in the US ?
Rob Vinall has posted some interesting Videos from his investor day a few weeks ago on Youtube
Chris Hohn (TCI) tries to kill the Safran/Zodiac take-over (presentation slides)
How stock investing looked in the 1950s with an appearance of Benjamin Graham (h/t Valueinvestingworld)