Posts from the ‘YRC Worldwide (YRCW)’ Category

Mar 9

Could my Next Big Play be Leveraged Companies? (Y, NXST, HOV)

Early last year I warmed up to the idea that housing was in the early stages of recovery and this single idea generated a number of successful investments for me (NCT, NSM, IMH, MTG, RDN, HOV…). With many of these housing investments having now played out I have been trying to think of what big idea might drive my strategy in the next 9-12 months.

What occurred to me rather suddenly this week was that perhaps I had already figured that out, had even been acting on the idea, though I had not articulated it consciously.

Companies with excessive leverage have been shunned for the past 5 years. Many have lagged as questions about their ability to continue as a going-concern have superseded any potential out-performance to the upside if things take off.

I think that this might be the year that changes. Read more

Feb 19

5 Comments

Week 85: Some Short Thoughts on Nam Tai, Yellow Media, Radian Group and Atna Resources

Portfolio Performance

Update

I finished a post over the weekend giving some thoughts about the macro-environment and how it pertains to my portfolio. As a consequence of the conclusions drawn, my portfolio has been growing and my cash level decreasing, to the point where I have now been on margin for the last month and a half. Right now I have about 11% margin. While I am typically wary of using margin, when I look at what I own there are no stocks that I feel compelled to reduce. We’ll see if this turns out to be folly. This is, however, about as much risk as I’m comfortable with, so any stocks added hereon will have to be balanced by equivalent removals. And as per the strategy I profess, I will sell without remorse if the market turns abruptly.

On to some of the moves I made over the past 3 weeks. Read more

Feb 10

4 Comments

My Take on YRC Worldwide’s 4th Quarter

I was a little surprised by the reaction to the release of YRC Worldwide’s 4th quarter earnings. While the stock moved about 6% higher, I thought it would have moved more. In the first 15 minutes of trading when the stock ran up to $7.40, that seemed about right to me. But it did not stay there, quickly falling back below $7 and settling at $6.81.

I was impressed by how good the results were. I didn’t expect as much improvement as the company showed, especially what occurred at YRC Freight (the company owns 3 regional trucking businesses which they consolidate as their “regional” segment, and a nationwide LTL business called YRC Freight). Read more

Dec 29

11 Comments

A very leveraged bet on trucking: YRC Worldwide

YRC Worldwide is a small position for me and, barring a significant move up, it is going to remain a small position. Nevertheless, its such an interesting idea that I want to go into some detail to explain my thinking here.

YRC Worldwide is the amalgam of two nationwide trucking companies, Yellow Transportation and Roadway, and three regional companies, New Penn, Holland, and USF Reddaway.

The business combination of the Yellow and Roadway nationwide was completed in July of 2003. It was followed by the acquisitions of regional truckers New Penn, Holland and USF Reddaway between 2003 and 2005. Along with the acquisitions came a heavy debt load, of which about $300 million unfortunately came due at perhaps the worst time possible, during the economic collapse of 2008.

Since that time the company has been in a battle to dig itself out of the debt hole; it has gone through a couple of workforce restructurings, a restructuring of its labor contracts and pension contributions, and a restructuring of its debt (which diluted existing equity to almost nothing). Read more