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Why would the USA invest in YRCW?
YRCW is the 2nd largest less than truckload carrier with the most stable work force in truck transportation. USA government investment can be justified as a matter of USA national security.
Consequent to the UST investment, USA freight costs may decline. YRCW will become the first choice for military vets who drove trucks.
At below 6, the EV is now below $1 Billion.
The MC is about $210 million.
$5.93 is not likely to be the bottom. It'd be unwise to start buying here. Wait until the last two weeks of December.
A good case can be made for the market cap to fall below $100 million. Assuming another 500,000+ shares are issued to compensate MGT and the BOD, then the price would fall to $100 million divided by 34.5 million fully diluted shares outstanding -- $2.90 a share. But if it falls below 3, there's strong pressure to push the stock down to 2. I think that's likely to be the bottom -- a $70 million market cap. I don't think YRCW will fall back to its all time low market cap of $45 million.
It's not been easy to find what YRCW is paying for its loans, but the the Powerpoint presentation released with earnings does tell us the interest rates YRCW is paying on its debt:
$75 million CDA notes at 7.9%,
582 million term loan at 10.6%, and
247.5 million in capital leases (the new trucks and trailers) at 14.5%.
It's going to be another seven years for YRCW to get all fixed up.
Steadily upgrading the fleet, by 2025, nearly all the tractors will be less than five years old, nearly all the trailers will be less than ten years old, and debt will be less than $500 million.
20 years after Bill Zollars had Yellow issue far too much debt to buy USF at the top of the market, YRCW will have finally recovered from his mismanagement.
Speculating On the 11/1/2018 3rd Q Earnings Report
YRCW is trading about 8, just above where it moved up on a gap in April, 2013 after reporting positive operating earnings for the the 2nd time in 6 years. Long term debt, pensions, and claims now total $1370 million, $890 million less than on 12/31/2012.
The Market Capitalization of YRCW is about $270 million -- 33.8 million shares, fully diluted, outstanding at $8 a share. Adding the $865 million in long term debt to the Market Cap, the Enterprise Value is $1135 million.
That's nearly the lowest Enterprise Value since 2013.
Earnings Whisper reports that the consensus earnings expectation is $.55 a share; a total of $18.59 million. On 9/12/18, YRCW said there would be a $7.2 million non cash charge to settle non union pension claims. YRCW did not pre announce pension claims in the past five years -- the stock was hard hit when the negative surprises were reported. That charge against earnings is NOT included in the $.55 estimate -- so that would change to $.34 a share.
Shorting into YRCW's earnings has been consistently profitable because there's always something. In addition to pension claims, YRCW sometimes reports lost lawsuit claims in the third Q. YRCW's technicals support shorting, since nearly all YRCW stock charts and technical indicators are bad.
Shorting YRCW here at it's low for the past year would be trading for a 1 1/2 drop to the low of 6.5 nearly 3 years ago in February, 2016. That's an 18.75% return.
Going long, buying YRCW before earnings is hoping for some sort of positive earnings surprise, even though there's a $7.2 million charge against earnings that may not be taken into account in the current stock price. The 9/12 press release told us that YRC freight revenue per shipment is up nearly 8% and the regionals revenues are up over 11% per shipment. Tonnage is down over 3% tho. The upside is 10, then to 11 since a move to 10 pushes YRCW above multiple moving averages. That'd be a 37.5% return.
YRCW reports Thursday Morning 11/1, before the open, at 8:30 AM. Fully margined, aggressively trading both long and short, an extremely adept and lucky trader can make over 50% in less than 30 hours in YRCW between 10/31 Wednesday afternoon before the close and 11/1 Thursday after the close. An unlucky trader could lose everything and a bit more; blowing out the account completely and ending with an unsecured margin loan. .
Nearly every transportation CEO is worse than James Welch. His focus has been on having YRCW stay in business and meeting service level guarantees. Everything else is secondary. Purchasing transportation to meet service level guarantees has made YRCW unprofitable every other quarter.
It's been a long slog, but YRCW has managed to stay in business. The underpaid, unionized work force has much lower turnover than well paid, non union competitors. Unionized drivers have a much better working life than their non union well paid competitors; that's why they don't leave.
YRCW is going to stay in business. It will not be taken over. YRCW won't go out of business because the underlying value of the firm -- ignoring pension liabilities -- is over $1.5 billion. It won't be taken over because the buyer would have pay off the pension liabilities and the buyer would NOT get operating loss carry forwards to match up against profits because the way the tax law works those losses can't be used.
Could some of the operating companies be sold away, unencumbered with the pension liabilities? That's possible, but it would not make sense. They are finally working together pretty well with YRCW freight and selling them away now would make everything less efficient and less effective.
So what happens when Hawkins takes over in July? YRCW continues to slog through, slowly paying down debt and upgrading the fleet and the workforce. Sometime in the next 2 or 3 years, after there are 3 consecutive quarters with earnings, and the stock moves up to trading above 30, YRCW will do a secondary offering of 17 million shares or so with a 3 million share over allotment for the underwriters priced between $25 and $30 with all of the proceeds used to pay down debt and to reduce the interest rates imposed by the operating leases for the new trucks and trailers. Debt will fall to less than $500 million and equity will exceed $1200 million instead of $1200 million in debt and just $50 million in equity in 2012.
Should you buy more YRCW here now while its cheap compared to other trucking firms? No. It'll get cheaper. Should you sell it short? Before most earnings reports, you can comfortably sell it short because there's always something that causes them to lose money. But don't hold on to buy it back; it will move up into the next disappointing earnings report. Sometime in the next two years or so as the economy turns down slightly and it becomes easier to get good new drivers and as the average age of the fleet goes under 5 years, the operating ratio may finally consistently fall below 96. That's when buying YRCW to hold on to it will makes sense.
YRCW has managed to hold onto $4800 million of sales year after year. Once the operating ratio consistently falls below .96, sales are likely to slowly rise a third or so inside of the next 3 years. In 2023, if everything works out, maybe $6.5 billion in sales, $400 million in earnings with 50 million shares and a $28 stock price -- that's a best case scenario.
Will YRCW get back to a $10 billion market cap like in 2005?
It's possible. It's not likely.
You could win Powerball and MegaMillions in the same week.
You could get hit by lightning while riding the NYC subway below ground. It hasn't happened even once in 114 years, but it could happen.
Deion Sanders hit a home run for the Yankees and scored a touchdown for the Falcons in the same week. Some day some other player may do the same thing.
YRCW may get back to a $10 billion market cap. Don't count on it, tho.
Nearly every transportation CEO is worse than James Welch. His focus has been on having YRCW stay in business and meeting service level guarantees. Everything else is secondary. Purchasing transportation to meet service level guarantees has made YRCW unprofitable every other quarter.
It's been a long slog, but YRCW has managed to stay in business. The underpaid, unionized work force has much lower turnover than well paid, non union competitors. Unionized drivers have a much better working life than their non union well paid competitors; that's why they don't leave.
YRCW is going to stay in business. It will not be taken over. YRCW won't go out of business because the underlying value of the firm -- ignoring pension liabilities -- is over $1.5 billion. It won't be taken over because the buyer would have pay off the pension liabilities and the buyer would NOT get operating loss carry forwards to match up against profits because the way the tax law works those losses can't be used.
Could some of the operating companies be sold away, unencumbered with the pension liabilities? That's possible, but it would not make sense. They are finally working together pretty well with YRCW freight and selling them away now would make everything less efficient and less effective.
So what happens when Hawkins takes over in July? YRCW continues to slog through, slowly paying down debt and upgrading the fleet and the workforce. Sometime in the next 2 or 3 years, after there are 3 consecutive quarters with earnings, and the stock moves up to trading above 30, YRCW will do a secondary offering of 17 million shares or so with a 3 million share over allotment for the underwriters priced between $25 and $30 with all of the proceeds used to pay down debt and to reduce the interest rates imposed by the operating leases for the new trucks and trailers. Debt will fall to less than $500 million and equity will exceed $1200 million instead of $1200 million in debt and just $50 million in equity in 2012.
Should you buy more YRCW here now while its cheap compared to other trucking firms? No. It'll get cheaper. Should you sell it short? Before most earnings reports, you can comfortably sell it short because there's always something that causes them to lose money. But don't hold on to buy it back; it will move up into the next disappointing earnings report. Sometime in the next two years or so as the economy turns down slightly and it becomes easier to get good new drivers and as the average age of the fleet goes under 5 years, the operating ratio may finally consistently fall below 96. That's when buying YRCW to hold on to it will makes sense.
YRCW has managed to hold onto $4800 million of sales year after year. Once the operating ratio consistently falls below .96, sales are likely to slowly rise a third or so inside of the next 3 years. In 2023, if everything works out, maybe $6.5 billion in sales, $400 million in earnings with 50 million shares and a $28 stock price -- that's a best case scenario.
Will YRCW get back to a $10 billion market cap like in 2005?
It's possible. It's not likely.
You could win Powerball and MegaMillions in the same week.
You could get hit by lightning while riding the NYC subway below ground. It hasn't happened even once in 114 years, but it could happen.
Deion Sanders hit a home run for the Yankees and scored a touchdown for the Falcons in the same week. Some day some other player may do the same thing.
YRCW may get back to a $10 billion market cap. Don't count on it, tho.
I'm not back in, but YRCW does look good here on stock charts. It had an ascending triple top breakout on Monday, December 4th. It's more likely to reach 17 than to fall back to 10 before year end.
Thanks for calling up what I posted here 2 1/2 years ago. That was a best case scenario. That's not what's happening here.
YRCW still has a Price/Sales ratio of less than 10% and a Price/Enterprise value of .25 I don't see the Price to Enterprise Value doubling in the next year. Maybe it will go from a quarter to a third. If sales come in at $4.8 billion, that'd be an EV of $1.6 billion, less $930 million in debt (presuming YRCW pays down $50 million of the debt or so like they have done in the past few years), that'd be a market cap of $670 million. With fully diluted shares outstanding of 33.5 million or so, YRCW would trade at 20 or so.
The slides at the Credit Suisse presentation show YRCW's objectives in improving the operating ratio's at YRCW Freight and the operating companies. If YRCW improves those ratios, then YRCW will have $100+ million more free cash flow. Projecting free cash flow to rise above $100 million as of 12/31/2018 versus the 12 month trailing free cash flow of just $2 million as of 9/30/2017 is VERY OPTIMISTIC.
I don't see that happening. YRCW has the right to purchase transportation with non union truckers to save money, but that has not happened even once in the past 5 years. Over and over, YRCW purchases transportation at top dollar to make good on delivery guarantees. That's what's likely to happen in this 4th Q of 2017. In the first Quarter of 2018, YRCW will lose money because of weather conditions, just as it has lost money every first quarter for the past five years. Winter happens every year, but blizzards are always a negative surprise.
YRCW will be fully recovered from Zollars mismanagement and all the debt taken on after a full generation has passed. Look for YRCW to be consistently profitable every quarter, including the first quarter when there's snow, in 2025.
No firm is buying YRCW. Look back to my previous posts about that.
Welch sold a 100,000 shares in anticipation of seeing his adult children and extended family over Thanksgiving and Christmas. I assume he gifts the kids and grandkids with cash, not YRCW stock.
The new investor relations guy at YRCW returned my call and said Welch sold the stock for routine estate planning. Welch called his I/R guy before the filing to deal with calls like mine.
Welch does not pay that much attention to the stock price or to his own compensation. He's running YRCW to keep the firm in business and to keep people working. I know that's hard to believe, but go to Seeking Alpha and read the conference calls since he's been at the top. Nearly all the transportation executives out there treat their people far worse than he does. He's earned the respect of trucking industry CEO's. At industry conferences, everybody turns up to hear Fred Smith who created Federal Express and everybody turns up to hear James Welch.
I'm listening to the conference call now. ALL the analysts sounded exasperated. It feels like making a hospital visit to an older relative who has recurrent cancers who you know will survive, but will not be going with you back to the amusement park anytime soon.
Management was open about what went well and what went badly so far this year. Too much purchased transportation and high prices on short term trailer rentals. Having to rent 53 foot trailers for a month to make good on deliveries when they only need 26 foot trailers for a week creates inefficiency.
That would be a positive surprise of 9 cents a share. I hope you are right.
Can YRCW come up with a way to eliminate that positive surprise? Could YRCW have $3+ million of expenses that were not accounted for in the pre earnings announcement made in mid October?
YRCW is building out 8 terminals. Could there be $400,000+ expenses at each that were not known in mid October, because they had not yet been billed three weeks ago, but are properly accounted for as occurring in the third quarter? Yes.
Again, I hope you're right.
Unless there is a blow out earnings surprise, the stock will go down in the after market on Thursday.
Never doubt YRCW's capacity to lose money.
The usual reasons are purchased transportation and unexpected property and casualty losses.
I think YRCW will be fully recovered from the debt taken on to purchase USF in 2005 in another 7 years in 2025. James Welch leadership for the past 6 years has enabled YRCW to survive, but it'll be at least another 5 years before YRCW will thrive.
AMZN is not going to buy YRCW. No firm is going to buy YRCW. Any buyer will become liable for contributions to teamster pensions that YRCW has not paid. That's a footnote to the FS -- more than a billion dollars. Also, the consequence of conversion of debt into equity and the reverse stock splits is that more than $500 million of tax loss carry forwards are NOT available to YRCW or anyone who buys YRCW. If YRCW has a full dissolution so that none of the pension liabilities or any other liabilities attach to YRCW assets, other trucking firms would buy some terminals. That's it.
Shorting into earnings will probably be profitable once again. I wish that would not be the case. The main reason I think they'll not meet expectations this time is that YRCW is in the process of opening up new distribution centers and terminals so there could be lots of unexpected expenses. It's nice to have unexpected expenses from expanding business, not contracting business. The last time YRCW had that happen was more than a decade ago. Also, all the roads to and from the terminal in Puerto Rico DID NOT EXIST for more than a month. Good luck everyone.
YRCW reported negative earnings surprises for the 2nd Q in 2013, 2014, 2015, and 2016. In August 2013, I lost more than $150,000 in 1 day from YRCW. Inside of one year, my $200,000+ of paper capital gains in YRCW became $400,000 in realized capital losses.
I've made money since then, but I've also lost a lot. I'm worth about $600,000. In July, 2013, because of YRCW and EGO, I was worth about $1,400,000. For that special woman who has $800,000+ in capital gains, I can offer losses for us to make a beautiful tax return together.
There's been no response to my ad on Craig's list.
It turns out that a man whose major contribution to a relationship is capital loss carry forwards is not sought out in the romantic marketplace, even by very wealthy women who consider themselves very practical.
If the 2nd Q of 2017 turns out to be a positive earnings surprise, the stock will definitely move up to double digits -- it'll get above 10. I don't think it'll make it to 16 unless there is a big, big surprise.
NEVER doubt the capacity of YRCW to lose money. The union okayed non union transportation services to be used by YRCW, but YRCW has NEVER used non union truckers that cost less. YRCW has repeatedly paid top dollar to other carriers to make good on delivery guarantees. Also, damage claims and early retirements keep on occurring, and both are usually enough to transform profitable quarters into losses.
What May Happen
I think YRCW's market cap will fall to $200 million -- about $6 a share with 33 million shares outstanding.
If the 2nd Q has a negative earnings surprise, the stock could easily fall to 3. Never doubt the capacity of YRCW to lose money.
YRCW will survive, but its unlikely to thrive for a while yet. Recovery from Zollar's mismanagement is going to take a full generation -- at least 20 years. Things really turned down after YRCW bought USF for $1.5 billion cash, issuing over $1 billion in debt. Full recovery will be after the guy who replaces Welch as CEO is replaced. Probably in 2025 or beyond.
This is not an investment. It's a speculation.
NO FIRM IS GOING TO BUY YRCW. Any firm buying YRCW will have to pay billions into the teamsters trust fund. That makes no sense.
I shorted 4000 shares going into earnings in the first Q and covered with a small profit -- I made about $500, not $5000+.
I have been out of the stock, most of the time, since the middle of 2016. The analysts who follow the stock all sounded disgusted on the most recent conference call. They seem to want to blame Welch, as do we, but at the Trucking Association meetings, other than Smith of FDX, he's the only men EVERYBODY shows up for. Chances are most any other trucking exec running YRCW would be messing it up even more. Hard to believe, but that's the reality.
This is the largest LTL trucker and has the most number of heavily experienced drivers. It has a neetwork that is finally reasonably integrated, although it has a long way to go. It is in the interests of the USA to keep YRCW alive for our national security. If and when, there is a Democratic President, a two thirds of Democrats in the Senate, and a Democratic majority in the house, we might see a national takeover of ALL interstate truckers to rationalize the networks and then IPO's of the government freightlines, but that is extremely unlikely. Not impossible, bu less likely than YRCW consistently earning money in the first Q.
Still worth over a Billion
That's because YRCW has $970 million in long term debt.
The enterprise value of YRCW is still over a billion. The EV is the market capitalization plus the debt less the cash -- that's about $1,060 million now. Four and a quarter years ago when YRCW moved up from below 7 to a high above 35, the EV was as high as $1,700 million. Then a year later, after most of the refinancing was completed, the EV reached $1,770 million.
The market cap was as high as $860 million in the Summer of 2014 with 30 million shares outstanding and as high as $400 million in the Summer of 2013 with 11 million shares outstanding, both times before 2nd Q results was reported. For several quarters in 2012, the market cap was about $50 million. Now, the market cap is about $250 million.
YRCW's trading a little above 8 and is likely test last year's low of 6.70 or so -- a market cap of $200 million. A good case could be made for the market cap falling as low as $100 million if the 2nd and 3rd quarter report negative earnings surprises once again, but chances are YRCW will at least break even.
I think 2nd, 3rd, and 4th Q will be profitable.
I think YRCW will be profitable for the year.
EBITDA will improve every Q versus the previous year's Q, TTM will improve every Q.
Technology improvements are creating a virtuous cycle for YRCW that may continue for two or three years.
Having a union during a driver shortage is benefiting YRCW; turnover is less than 10%. They have over 500 drivers with over a million miles with no accidents and 20 drivers with over 4 million miles with no accidents.
YRCW Freight trucks and trailers are being better maintained and are being upgraded.
Federal Motor Carrier Safety Administration reports indicate improved maintenance and reduced violations for YRCW trucks and trailers for the trailing four quarters.
http://tinyurl.com/zj6...
10% of the truck fleet and 5% of the trailers have been replaced. At the current pace, in less than five years, more than half the trucks and more than a third of the trailers will be less than 5 years old. In ten years or so, ALL the trucks and trailers will be comparable to the trucks and trailers of the best run LTL carriers.
The safety upgrades inside the truck cabs are already making a BIG difference. No YRCW drivers are falling a sleep at the wheel from apnea.
YRCW is going to survive. There's no bankruptcy in the future. Recovering from Zollars NOT integrating Yellow Freight and Roadways into one company in 2003 when they merged and recovering from buying USF for over $1 billion in cash in 2005 will end up taking a full generation -- about 20 years.
YRCW will be a profitable, superior LTL carrier by 2025, but not a lot sooner.
I hope not to be right about YRCW falling down again.
Projected YRCW Stock Performance AFTER the 4/28 Earnings Release
Consensus earnings estimates for the 1st Q is a loss of 38 cents a share. That means a loss of $12.7 million. YRCW has consistently mismanaged to lose money in the first Q and to have negative earnings surprises. For the past three quarters. lawsuits and workmen's comp have been favorable, but if YRCW reverts to its 1st Q pattern for the past 4 years, something or other will make the loss worse. I picture a $20 million loss for the first quarter.
If there's a $20 million loss and YRCW has already tested its trailing 52 week low of $6.28, its reasonable to picture the price falling to its all time low after the 2nd reverse split of $5.75 in March, 2013. Adjusted for the tripling of shares outstanding, that would be $1.73 a share.
SPECULATORS -- no one owning YRCW is an INVESTOR -- buying here when YRCW has a market cap of $295 million have a downside risk of 30 to 80%. The market cap is likely to fall to $200 million BEFORE the earnings report and may fall to $60 million AFTER the report.
YRCW is likely to retest the 52 week Low BEFORE the 4/28 Earnings Release
4 million of 33.26 million shares outstanding are sold short. Most of the time, persons who short make money. The Dow Jones Transportation average moved up from 6625 in late January to 8075 two weeks ago. It's pulled back about 5% since then. Usually a pullback would go to at least 10%. With the DJT at 7652, its likely to go down to 7300 or below.
YRCW's beta is now 3.6 according to Google Finance, so a 5% drop in transports could result in an 18% drop for YRCW, rounding up -- a drop of 20%. That'd move it down from 8.875 where it closed today to 7.10, but the way things trade -- 7 is likely. The low in February on the 4th Q earnings report was 6.28 If 7 is likely with a DJT pullback, going down further to test that February low BEFORE the earnings report is also likely.
There's not much that's good in YRCW's stock chart or in the Transport Averages. Sorry to say that.
Awful Daily and Intraday Stock Charts
At year end, I sold 12,000 shares at 14.20 or so. I pictured it'd be weak and I'd be able to get back in cheaper a few weeks later. I did not picture this rout to below 11 on just January 11. A good case can be made based upon how badly the charts look for YRCW to trade below 10 and test the area between 7 and ten where it traded for about a month in November of 2013. There's also a decent chance of YRCW falling back to trading between 6 and 8 for a few weeks like it did just before the big gap move up in May of 2013.
The DJT says we're in a bear market. CSX reports on T 1/12 after the close and KSU reports on F, 1/22 before the opening, no truckers are reporting until the following weeks. Six days into the year, with nearly every day down at least 1%, we're likely due for another 5 to 10 days down another 10 to 15% with one or two slightly up days out of every 5. We're not likely to get a crashing reverse V bottom where the market drops 5+ percent from the opening and comes roaring back 1 or 2% above the opening price. Since that's what everybody's looking for -- it won't happen. What happens most often in badly oversold markets is that they become even more badly oversold. They do not magically reverse.
Most people in today's markets have NOT experienced a wrenching bear market where most everything goes down day after day and where nearly everybody who shorts does so too late in the game to make money, but with plenty chances to lose money covering at a loss on the 1 or 2 days when the market spikes up. Many people who have retired early with plenty of money with little market trading experience are about to get plenty of experience, and much less money.
LTL Truckers Make Less When Gas Costs Less, Truck Demand is down, & a possible positive surprise
LTL truckers have contracts that add a Fuel Cost Adjustment to all their services provided. The FCA is just a pass through of the cost of fuel, plus a few % for overhead. When fuel costs go down, the FCA also goes down, so LTL truckers may make less when gas costs less.
A Wall Street firm that regularly surveys the LTL industry says that demand is down, supply is up, pricing is going down, and firms are getting more efficient. It is very possible that for YRCW operational efficiency improvement will exceed impairment from reduced pricing. Also, YRCW may have some highly profitable deliveries in the next two weeks from retailers whose inventories are too small for Christmas.
YRCW has improved its operating ratio for two quarters in a row. The new trucks and trailers, the dimensioners, the safety programs, and dispatchers' tablet computers at the loading docks -- instead of a PC a quarter mile away in an office -- could lead to a 1+% improvement in the operating ratio every month for the next two years -- from 96% to below 90%.
If everything goes right: if YRCW has an operating ratio improvement in the 4th Q, if insurance losses are low, and if workmen's comp claims are low, then in late January, 2016, YRCW may report over $10 million in additional, unexpected profits to the bottom line in the 4th Q -- about 30 cents a share above the consensus estimate of 22 cents a share. 50+ cents a share in the 4th Q, annualized with a market PE (not an LTL PE) could send the stock to over 40, and if my grandmother had balls.......
In the past five years, NEVER has everything gone right.. Hope springs eternal.
The stock chart is weak. It looks likely to get back down to 12 before it gets to 20
Response to Seeking Alpha Article Saying Welch is Over-Compensated
http://seekingalpha.com/article/3713556-yrc-ceo-overpaid-at-10-million-in-2014
The vast majority of CEO's are overpaid. James Welch honestly earned that $10 million; most all of it from stock options awarded to him because YRCW has survived, instead of going into bankruptcy and dissolution. Although he very much appreciates getting paid very well, he has not been CEO primarily for the money; he came back to turn the company around so it can survive and thrive. He came back so his decades of effort at Yellow Transportation, where he rose up from being a driver to being CEO, would not be for naught. Welch was fired in 2007 when he did not support Zollars (the previous CEO) and was brought back to turn everything around in 2011.
Welch and the executive team he put together upon taking over in 2011 are responsible for YRCW still being in business. The market capitalization has grown from a bottom of $50 million to $570 million or so. The enterprise value (market cap'n plus long term debt) has grown from $1.4 billion to $1.7 billion, debt has decreased from (nearly) $1.4 billion to less than $1.1 billion, and funded debt to adjusted ebitda has fallen from 11.9X to 3.2X.
In the transportation industry, what you've written is far more applicable to current CEO's of airlines and rails. Excess profits have not been made by airlines and rails because of CEO outperformance since 2009; excess profits have been made because the economy has been turning up from the bottom.
In like fashion, Bill Zollars, the CEO replaced by James Welch, thought he was God's gift, but he was just a man lucky enough to be in charge when money was cheap and LTL demand was up. The $105,000,000 worth of stock he had YRCW buy up in the open market in 2005, 2006, and 2007 was worth less $1000 in 2011 when Welch came in.
LTL means less than truckload.
What follows was copied from ltltraffic.com on 7/26/2011.
Bill Zollars, the worst CEO in the history of LTL transportation has finally left the building but what he has left behind still lingers as an ongoing concern. Despite the town-hall meeting celebration that took place on Friday, YRCW really has nothing to celebrate. They are not out of the woods yet. Someday they will have to show a profit. Rumours for the past month internally and externally was that YRCW made a profit, but they didn't. They lost 38.7 million dollars. Sure they lost less money than they did in the first quarter, but they still haven't posted a profit in four years. It's ridiculous that this company spins its ills as thrills of greatness.
Since Bill has been in command of YRCW, they have lost over FIFTY THOUSAND EMPLOYEES and over 4.5 billion dollars. Sure the economy was tough, but it was tough on all carriers. Excuses and more excuses is all that we ever heard from Bill Zollars. There was nothing stellar about Zollars. He created the biggest loss in ltl trucking history. Let history speak correctly about Bill Zollars. He was a colossal failure, who should have been removed years ago. As he departs, he leaves the company with several pending lawsuits that could shut down the company. The shareholder lawsuit for hundreds of millions is in progress and the ABF lawsuit for 750.000,000 million dollars is still pending. At the end of the Day, Bill has nothing to hang his hat on. YRCW and the Union couldn't Get rid Of Bill due to his positional alignment within the company. Bill labeled himself CEO, Chairman of the Board and President. He out numbered any decision that could have been made against him. Plus the company couldn't afford to push him out of the door due to his contract. They would have had to pay millions to get rid of him and YRCW couldn't afford to do that.
The Bottom Line - Zollars was forced out and agreed to leave after the completion of the restructuring agreement. They couldn't get rid of him sooner, or they would of had to pay him a rumoured 35 million. Now, James Welch the old president of yellow takes over the beleaguered trucking company. With economist predicting a rough 3rd and 4th quarter, things won't be easy for Mr. Welch and YRCW. At least the company and its employees won't have to listen to the Lies and Deceptions Of Bill Zollars any more. Bill Zollars should have been picked up by the seat of his trousers and hurled out of the corporate office years ago. When Bill took over the stock price was 66.00 dollars a share. He leaves the company with it's stock price sitting at 1.03 cents. Good Riddance!
AT LAST
Holland's new Grand Rapids Terminal
The terminal was built by First Companies, a local developer/contractor. It cost $11 million and was build in only nine months. It opened on August 14 and has triple the yard space of the old terminal. I assume YRCW is renting the terminal.
The new terminal should help with truck driver recruitment and may reduce accidents since there is much more room to maneuver.
Here are news stories about the terminal from two local MI business papers:
http://www.mlive.com/business/west-michigan/index.ssf/2015/08/holland_trucking_company_opens.html
http://www.grbj.com/articles/83227-change-ups-hollands-terminal-triples-yard-size
Closing the Rockaway NJ terminal and transferring the operations to other terminals to generate an annual cost savings of $500,000+ is the type of thing that should have been done on a regular basis more than a decade ago after YRC acquired USF in May, 2005 and 2 years before that when Yellow Freight acquired Roadways.
No attempt was made to integrate Yellow Freight with Roadways. From the July 3, 2003 New York Times:
<Mr. Zollars took a different view. In an interview, he conceded that some operations might eventually have to be consolidated, but for the next year or two, he said, he is happy to avoid the pains of integrating companies.
''This acquisition is not about shrinking,'' he said. ''It is about growing the customer base and services we sell. So why slam these companies together and hope for the best?''>
A dozen years later, Zollars now receives more than $750,000 a year in stock based compensation from serving upon the boards of Cigna, Cerner, and Prologis. 35,000+ terminated employees of the mess he created receive bupkas.
Zacks rating of YRCW should be ignored, but for its automated technical analysis -- price projections determined from YRCW's stock chart.
Zack's write up refers to YRCW brand names and subsidiaries that have been closed down or sold. Yellow Transportation, Roadway Express, Reimer Express, Meridian IQ, USF Bestway, USF Glen Moore, and the Chinese joint venture have ALL been out of business since 12/31/2012.
It's highly doubtful that an editor at Zack's reviewed the rating. Apparently, no human being was involved.
YRC Jumps Most Since 2013 as Trucker Turnaround Takes Hold
YRC Worldwide Inc. surged the most since 2013 after exceeding analysts’ profit estimates, signaling that a turnaround is taking hold at a trucker struggling with annual losses since 2007.
“A monster Q2 beat,” Deutsche Bank AG analyst Robert Salmon said Friday in a note to clients following YRC’s second-quarter earnings release Thursday. “BBQ ain’t the only thing hot right now in KC,” Stifel Financial Corp.’s David Ross said, referring to YRC’s headquarters near Kansas City, Missouri.
YRC racked up $1.4 billion in debt from acquisitions and what Chief Executive Officer James Welch has called “numerous missteps” before he took the top job in 2011. Welch has been reshaping the company to focus on its most-profitable operations, ceding market share where necessary to achieve that goal, Ross said in a note.
Adjusted earnings before interest, taxes, depreciation and amortization were $109.4 million, Overland Park, Kansas-based YRC said Thursday. That outpaced the $83.6 million average estimate of four analysts in a Bloomberg survey.
YRC rose 26 percent to $19.30 at the close in New York, the biggest one-day jump since November 2013. The advance pared this year’s drop to 14 percent.
The company was once the biggest U.S. trucker by sales, before the stumbles that twice dragged it to the brink of default since 2009, only to step back after getting help from creditors and union concessions.
Bloomberg story by Lauren Thomas July 31, 2015
YRCW is trading above its 10, 20, 50, 100, and 200 day moving averages, computed every which way.
YRCW's internal return from PC tablets at the loading docks, new trucks and trailers, and emergency devices in the truck cab to catch drivers falling asleep is over 8.25 percent. Jamie said YRCW would not use extra cash now to pay down their 8.25% debt because the internal return from even modest capital expenditures that had been deferred for years (like the sleep detection devices) is higher.
From your mouth to God's ears.
Terminals were sold and leased back 3 years ago.
The dimensioners may be improving revenues. They have been working out well for UPS.
Swift's report was fair, the stock dropped less than a full point and then move up 2 points.
CHRW, a DJT, reported 94 cents, above the 86 cents expected, and moved up 5% today. All the other truckers and logistic providers in the DJT moved up in sympathy.
What makes the difference is purchased transportation and lost lawsuits. YRCW is usually purchasing transportation at top dollar to make good on delivery guarantees. YRCW has had the right to purchase up to 5% of revenues per Q in outside truckers, including non union truckers, but has not yer ever purchased transportation at a discount to make money. YRCW has repeatedly purchased transportation at huge premiums to make good delivery guarantees.
The interview with Welch is subscriber content only. It's not available to me on line. If you can copy it onto this platform, I can read the article and would be most appreciative.
Two years ago, shorting YRCW at Schwab required a minimum transaction size of $50,000 with an annualized interest rate of 40%.
Today, YRCW is freely available to short at Schwab. Borrowing 40,000 shares is no problem at all.
A good rule for speculators is that when a stock that's always been hard to borrow to short becomes easy to borrow -- DO NOT SHORT.
Welch changed the parking policy his first week as CEO.
yesmistermorningstar, you sure came up with a lot when you searched for stuff. Thank you for all that.
The FNN analysis doesn't mean much at all. It's what comes up when an a screen is done without thinking through.
I don't know. Sorry.
Improving Stock Chart
YRCW opened up on a gap up three days in a row.
On Thursday, July 9, YRCW opened at 12.45, above the W close of 12.34. On Friday, July 10, YRCW opened at 13.01, above the Th close of 12.80. On Monday, July 13, YRCW opened at 13.10, above the F close of 13.
YRCW is now trading above its 10 day moving average of 12.79 and above its 21 day moving average of 13.36
The 50 day moving average is 13.89. Just above that, 13.98 is a resistance level likely to be crossed if the 50 day moving average is crossed.
The Moving Average Convergence/Divergence (MACD) indicates a Bullish Trend and the Up/Down volume pattern indicates that the stock is under Accumulation.
During June, as YRCW fell in price, short positions were covered slightly, instead of being increased. Short positions fell from 2,209,623 on May 29 to 2,140,418 on June 15 to 2,122,055 on June 30.
The ten day average of share volume has dropped to less than 400,000 shares per day, the least its been in the past year, indicating that the sellers may be out.
That's been the rumor for the past three years. It makes little sense. DHL can borrow money at very low interest rates, may be able to run some of the distribution centers a little better, and can get Mercedes trucks cheaper.
If DHL bot YRCW, DHL would be obligated to make good on YRCW's deferred payments to the Teamsters Pension fund. That would add several billions to the buy price.
July 9, 2015 Gap Opening Up
YRCW opened at 12.40, a ten cent gap opening up, on thin volume. It's not much, but it's the first positive price action in a while.