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YRC Worldwide Inc. Message Board

  • alexorjona alexorjona Jun 8, 2006 9:47 AM Flag

    Zollars and the YRCW story seems

    impressive. The stock price is unreal cheap. If YRCW performs despite all of the lowly expectations there surely is a ton of upside. When willthe share repurchases start to accelerate?????

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    • The street is justifiably nervous about the rollup. As the recent price action of earlier this year with the HD and WMT inventory corrections demonstrate, they do not entirely trust Zollars. That will take some time to overcome. So far, he seems to be a straight shooter to this guy. He is willing to say bad things when they happen and good things when they happen. The street is unfortunately used to bs artists. When they say something bad and blame something, it is usually something else that has caused the problem. Very often a systemic one within their organization that they want to blame on something else.

      Share repurchases are ok if you have free cash flow and are not all that leveraged. I would rather see YRCW decrease some of its leverage first. Realistically though, they have to play to the institutions and "return" some of the earnings, so absent a dividend, the repurchase route is the way to do it. It also has the attraction that if BB clog dances on his genitals and shoves us into a recession with his "inflation targeting" you do not have to continue to do it in the future.

      The more I investigate YRCW the more I personally like it.

      Disclosure: 4th largest position in my portfolio.

    • Value stock if there ever was one. PEG .89:

      One quarter's earnings equal~1.60!

      If real estate post is accurate, add $9/shr to book value.

      Long YRCW and like it.


    • yrcw owns a lot of depreciated real estate. I'm thinking that is worth an easy 500 million that doesn't show up on the balance sheet.

      • 2 Replies to linkal17404
      • It also has a pile of intangibles and goodwill on the books. The net tangible assets are less than the liabilities. Basically the entire and I mean entire book value and then some is vapor. If this thing were to file bk tomorrow, there would be very little that the shareholders would get out of it.

        That said, this is not atypical of a rollup. If Zollars can pull through with his $5+ of earnings this year, the balance sheet can get a lot better. He has stated that he intends to use some of the earnings to pay down debt and some to buy back stock. The stock buyback will not help the balance sheet, but the debt paydown will. A reduction of any outstanding on the revolver in a rising interest rate market will be beneficial so long as you do not need the capital to increase the fleet size. His statements are that he is through with adding new companies to the rollup, so I think he understands where the interests of the company lie.

        Do nor mistake me, I am long YRCW, but be careful of assumptions based on the balance sheet book value. Its not really what the number says.

      • Cool!

9.17+0.08(+0.88%)May 26 4:00 PMEDT