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Yellow Corporation: An Attempt To Escape The Pothole

Apr. 04, 2021 9:29 PM ETYellow Corporation (YELLQ)11 Comments


  • Yellow Corporation may have shown improvement in its financials over the past decade, but achieving profitability and stable growth is still a long process.
  • Dividend payments are out of the question as viability and cash inflows remain low with increased borrowings.
  • After the stock price continuously decreased and eventually hit the bottom in the previous year, it gradually shifted its direction to start a bullish pattern.
  • The reopening of the economy may stimulate recovery and growth in the company and the whole industry.

Yellow Corporation (NASDAQ: YELL) has been through a lot from its struggling financials to the adverse effect of the pandemic. Although improvement has become evident, achieving stability and substantial growth is still a long process while the possibility of dividend payments remains low. Nevertheless, the upward pattern of the stock price conveys optimism as the economy reopens which may help the industry recover and bounce back.

Company Financials

Operating Revenue and Operating Costs

From a horse-drawn hack and a Model T Ford, Yellow Corporation has increased its operations and flourished over the years. In the 2000s, it had numerous acquisitions that further expanded its capacity and coverage. It had substantial growth in the core operations as revenues tripled from about $3 billion to $9 billion. However, its struggles to optimize its costs and maintain efficiency led to its contraction as revenues plummeted to $4-$5 billion. Moreover, the boom in the industry enticed more business openings and increased competition which affected the demand and revenues of the company.

In 2010, the operating revenue eventually dropped to $4.36 billion after several years of contraction. It started to expand again in 2011-2014 from $4.88 billion to $5.06 billion and showed its adjustments to the changing market environment. Although YELL regained its footing and protected its operations, its potential to bounce back is yet to be achieved. It had ups and downs for the next few years, but changes have become quite manageable.

Revenues decreased again to $4.7 billion before increasing again to $4.88 billion in 2016 and 2017, respectively. This can also be seen in its efficiency to respond to the market and operational changes. The operating costs followed the pattern of the revenues although they were managed well which caused gross profit margin from 64% to 72%. In 2019, the contraction happened again as revenues decreased from $5.1 billion to $4.88 billion

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Comments (11)

I worked at big R ( Now YRC ) in Hagerstown Md for 6 years 2 months and 14 days as checker # 57 in the late 70’s and early 80’s. All I’m positive of was that people given the better jobs there got paid well plus huge bonuses. There was never any incentive for the dock workers to be productive. The most productive docks workers basically had to carry the slugs and management.
For me, it was a nightmare that only ended when I resigned. It felt as though a huge oppressive cloud holding me down, holding me back had been obliterated and the sun was shining again !
One of my greatest joys has been watching big R deteriorate into nothing. So many great , hard working employees ( top 5 producers ) left because there was nothing in it for them.
Now big R ( YRC ) is reliant on government purchases of their stock to keep them functioning? Another taxpayer funded bailout all the while employees get bonuses funded with my tax dollars ? Please, they’ve bummed enough already. It’s gone too far. I do not agree with the argument that they’re needed by our government.
BigGuy profile picture
Yellow is a speculation, not an investment. Last Fall, the Accounting, Finance, and Legal leaders/officers all changed. Every quarter, the firm has some sort of negative surprise. For 3rd Q 2021, I expect it will be excessive purchased transportation costs and some lost lawsuits.
Francis Stockington profile picture
Maybe next quarter....
@Francis Stockington this company has management problems vote against all board members
CEO is fool or crook
Crook: he received one million and company gives millions dollars bonuses to employees he new how bad there are doing.
FOOL case every business manager looks at his computer and monitor every single activity pay out expenses receivables...
If he's not crook he dumb ass CEO he isn't even monitoring basic information
Tack profile picture
YELL has been a wonderful candidate for selling puts, as the premiums have been very substantial even as the price has trended upwards.
larryjust profile picture
I always appreciate your insights, Is this one to sell calls against if the shares are put to me. Also, I'm thinking of selling more puts. Do you have thoughts on that? Larry
Tack profile picture
@larryjust I have had six months of making nice profits selling short-dated puts ATM or slightly ITM because premiums were quite high. Today marks the first occasion I have found myself underwater on my put positions, as prices plummeted below my strikes, less the premiums received. I'll see where they go until May 21, as I think it's probable that the major damage is done. I'll think about selling more ATM puts, depending on the premiums offered.
larryjust profile picture

Sounds good! My position was small, so I just sold an equal number of the May 7.50 puts yesterday. Thanks!
OverTheHorizon profile picture
Trucking will be a big winner in the recovering economy and increased infrastructure spending. YELL USAC
@OverTheHorizon I agree although I do realize it is seriously loved stock by the bears out there. I have played the other side, catching a ride when they bottom it out and it been just as profitable to me as them, it takes two to tango.

I do think that is ever a turn around can happen it is now and in the next 2 years as trucking business is definitely on the upswing. Dry bulk shipping even the worst of the worst over the past decade are now in turn around and making money now and in the coming years hand over fist and with the way the container shipping business is now and will be in the coming 2 years minimum trucking will follow suit.

Many will say there are better ones, I disagree and love the girls no one ever asks to dance, they are better all the way around. Just have to wait for the right song and judging the past week that song has not been added to the playlist yet, but I am watching the chart DJ.
OverTheHorizon profile picture
@Thomas Coutts well said— let’s rock.
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