| YRC Worldwide: Trucking in Trouble YRC WorldWide (YRCW) is tanking over 50% on bankruptcy speculation. The large trucking company has been entangled in brutal labor renegotiation’s and is at the heart of the economic downturn with their highly economically sensitive transport based business. On Friday the company reported a $158.7MM loss which was followed up by a debt exchange announcement this morning. Investors are growing increasingly concerned that the announcement could result in an eventual Chapter 11 filing. Although the company is having cost difficulties (primarily labor related) the weakness at the company is primarily economically related. On the conference call CEO Bill Zollars detailed the economic struggles which we continue to see across the entire real economy. His comments would be most unwelcome to anyone who has bought into the recent stock market surge which is now not only very expensive, but pricing in very optimistic economic and earnings growth in 2010:Complete Story » seekingalpha.com |
Truck Tonnage Jumps in November, But There's Still a Rocky Road Ahead The Pragmatic Capitalist submits: The trend in truck tonnage is moving in the same direction as rail freight. Though the comps are very easy on a year over year basis tonnage was still down 3.5%. Much like the trend we’ve been seeing in freight volumes the trend is certainly positive, but the year over year comps remain very week. There is no denying that the economy is coming off its very low trough, but the strength of the rebound is certainly in question. From the ATA: ATA Chief Economist Bob Costello said that tonnage is moving in the right direction. “Slowly, but surely, truck freight has started the recovery process and November’s solid increase is a very positive sign,” Costello noted. He said that November’s tonnage levels were pushed higher by improved economic activity, as well as by an inventory correction that is near completion. “Truck freight had been hurt by both slow economic output and bloated inventories; however, we now have evidence that the inventories are in much better shape, which will not be such a drag on truck freight volumes.” Costello continued to be cautious about the future though. “While the economy and trucking is improving, the industry should not get overly excited about the sizeable increase in November. I continue to believe that both the economy and truck tonnage will exhibit starts and stops in the months ahead, but the general trend should be for moderate growth.”Complete Story » seekingalpha.com |
Pigs Get Fat, What About HOG? Ockham Research submits: Harley-Davidson (HOG) is surging nearly 10% higher thanks to RBC Capital Market’s analyst lifting his price target on the stock from $32 to $36. The research note points to the fact that Harley has lagged behind many other leverage-dependent consumer stocks, and they have faith in the restructuring plan in place. That being said, the stock has been on an absolute tear of late, jumping more than 25% since the beginning of March; more than quadrupling the return of the S&P 500 index. Part of the optimism is due to a rumored private equity buyout, but those rumors have failed to materialize into anything concrete as of yet. This particular analyst note caught our eye because at a price of $36, we would almost certainly downgrade Harley to our overvalued stance. As it currently stands, we have a neutral or Fairly Valued rating on HOG, but we have to acknowledge that the price appreciation has come in the absence of any real improvement in fundamentals in the last month. The stock has been the subject of buyout rumors and received analyst attention, but they have not raised guidance or shown that business is going better than expected. Coincidentally, it brings to mind the old warning to investors, “pigs get fat, and hogs get slaughtered.”Complete Story » seekingalpha.com |
Opportunity in the L.B. Foster and Portec Rail Products Takeover Saga Tom Konrad (AltEnergyStocks) submits: LB Foster (FSTR) may not succeed in its attempt to buy Portec Rail Products (PRPX) unless they raise the offer price. As a Portec Rail Products (PRPX) shareholder since 2007, I've been watching the saga of L.B Foster's (FSTR) attempt to buy the company fairly closely, and it's been a lot more interesting than we could expect. I've put together a detailed time line at the end of this article.Complete Story » seekingalpha.com |
4 Promising Mid Caps Largely Being Ignored by the Market John Reese submits:To most investors, the name Thyra Zerhusen probably doesn’t ring any bells. It should. Complete Story » seekingalpha.com |