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Investment Thesis
In my previous article on Yellow Corporation (YELL), I concluded the company was overvalued on a relative basis and was not a buy-and-hold type of investment. You can read about it here
Yellow Corporation: Still Risky Despite The 40% Drop Since Mid-December
Summary
- YELL is now profiting from favorable pricing, but expenses in the freight industry are quickly increasing, which could limit the company's potential to improve profits.
- YELL reached a record amount of debt in the last quarter, which comes at a hawkish turning point in monetary policy, which adds another layer of risk for shareholders.
- I believe the company has limited potential to outperform the market over the next couple of months and could be an interesting short idea.
About me: Value-oriented investor, seeking low-risk investments with the potential to deliver high returns. I like to analyze commodities, ETFs, and cash-flow positive businesses that have a moat and growth opportunities.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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