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Anthony Alfidi
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Anthony J. Alfidi is the founder and CEO of Alfidi Capital, a private research firm in San Francisco, California. Alfidi Capital publishes free financial research with honesty and humor. Mr. Alfidi holds a Bachelor's degree in human resource management from the University of Notre Dame (cum... More
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  • YRCW Unloads Truckload Unit While Truckload Demand Rises 0 comments
    Dec 16, 2011 2:05 PM | about stocks: YRCW

    YRC Worldwide continues to compound its material weaknesses. This Teamster-dominated company is selling off a truckload unit to focus on what it claims to do best - LTL. The problem with this move is that YRCW simply hasn't been doing LTL very well at all. The company's financial results speak for themselves.

    The company's Dec. 2 reverse split briefly raised the share price to avoid a delisting action. That share price has dropped by over 24% since then because the company lost almost three times as much money in Q3 of this year as it did in Q2. That Q3 loss is twice as large as the loss in the same quarter in 2010.

    Divesting a truckload unit is exceedingly dumb given strong demand for truckload volumes in recent weeks. Maybe handling truckload freight really is too difficult for Teamsters. It would require them to drive non-stop for long hauls, whereas frequent LTL stops for load reconfiguration give them opportunities for more coffee and donut breaks while on the clock.

    This company's string of losses and odd strategic decisions continues unabated. The reverse split has delivered bearish investors a unique opportunity to profit by temporarily raising the price out of penny stock territory. This may prove to be a fleeting window to sell short outright or buy put options in anticipation of further share price declines. That's not investment advice in any way; rather, it's a disclosure of strategic options under consideration here at Alfidi Capital.

    Full disclosure: No position in YRCW at this time, but seriously considering opening a short position within the next three business days. Watch this space for a final decision.

    Stocks: YRCW
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