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. .
