YRC Worldwide Inc (YRCW)

[Avoid]

YRC Worldwide Poised To Triple

"The average Enterprise Value (EV) to EBITDA ratio for the trucking industry was calculated as 9.9; taking out, the two outliers FFEX and ABFS with ratios over 32 gets us to an average of 7.9 for the rest of the group (not including YRCW, FFEX and ABFS). In the case of YRCW, the company in their prior earnings report already projected FY 2011 EBITDA of $210 million. Apply that to a conservative 7.9 EV/ EBITDA multiple gives us a target price of almost 15 cents, three times above current prices. Of course, this is based on a very conservative calculation of (1) including all of the preferred convertibles in the share calculation, including those that can be converted only after July 22nd, 2013; (2) assuming an EBITDA of only $210 million which the company has projected to 2011. Historically, YRCW has generated EBITDA of between $500 and $800 million in the period from 2004-06. Assuming that they generate even two-thirds of the middle of this range will lead us to a target EBITDA sometime in the near future of almost $450 million. At that price, our target for YRCW would be 30 cents."

http://seekingalpha.com/article/297926-yrc-worldwide-poised-to-triple