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YRC Worldwide Inc. Message Board

  • kenathom kenathom Jan 3, 2010 5:28 PM Flag

    Why You Should SELL


    >YRC grew to an LTL giant NOT by having a better mousetrap but by buying and over paying for other LTL players. Stand alone, Yellow, Roadway or USF would maybe have managed to stay in top 5 LTL carriers with FedEx, CNW and ODFL having been far more dominant with primarily ORGANIC growth to count on.

    >YRC's revenue bleed has been substantial. 10 Billion Revenue was the annual peak. in Q4 they will do a Billion in revenue and still LOSE MONEY. strategy has been to shrink to profitability. shrink customer base, shrink network, shrink debt payments, shrink payroll, shrink benefits. they have accomplished all of that EXCEPT the customer shrinkage has been greater than they would have liked and they have continued to LOSE MONEY. there is a fresh excuse every quarter. it's the economy, it's the competition, it's the analysts being irresponsible. it's a combination of all those things, but a superior service product would have mitigated the loss, allowed yield to be maintained and a smaller customer base would have a better shot at profitability.

    >Speaking of Yield - YRCs, both National and Regional, is well below their primary competitor's yield, hauling the same product the same distance. go to investor sites for ABF or ODFL or CNW and check the yields... the revenue per hundred weight or cwt... the difference is staggering. this is why they lose money

    >Debt Folks, YRC was successful, many props, in getting rid of almost a half a billion in debt... they still have $1.2 Billion more to deal with. they've deferred so much expense into 2010 that it's hard to keep up with.

    >Dilution. someone needs to explain this to me. If a stock is trading at $1 a share when there is 66 million shares outstanding and another 40 million common shares are granted as a result of Debt for Equity swap and almost a BILLION more common shares lurking behind the disguise of Convertible Preferred shares... so those 66 million shares are now 6% ownership. With that being said, how is this stock worth anything other than 20 Cents or so? in the euphoria of getting the D4E deal done lots and lots of people who understand SOLD and less people Bought... 75 million shares... anyone that was Short could have covered and there is a completely turned over set of bagholders for this stock.

    >The Competition: they have a better product overall. tough to beat a New Penn but they aren't what they were. tough to beat USF Holland but they are a shell of who they were thanks to Long Haul management mentality. Yellow and Roadway who make up the national group are busy reminiscing over the good ol days and pointing fingers at each other and trying to figure out who to blame. meanwhile the competition is taking share, in chunks.

    if you want to day trade and have that mentality, yrc is a play for you, though Short is the best bet. if you want to invest, for heaven's sake take your dollars and go somewhere else.

    if you don't believe me, you will believe the Q4 results. they will lose $100 million dollars and run and OR of 110 or more meaning they spend $1.10 in Costs for every $1 in revenue. the money they save going forward on lowered interest expense pales in comparison to ongoing losses.

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