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.
