Why YRC Worldwide's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of YRC Worldwide (NASDAQ: YRCW  ) fell as much as 17% today after an analyst downgraded the company.

So what: Credit Suisse initiated coverage on the company with an underperform rating and a $7 price target. What's unusual is the massive downside priced into the call, something analysts aren't usually inclined to do.  

Now what: Earnings are due out Thursday, and that's when we'll know more about where the company is headed. The big questions surround how fast or slow a turnaround effort is going. Everyone expects a loss this quarter and even for the rest of 2013, but when does management expect a profit? That's what will determine whether the bulls or bears will win.

Interested in more info on YRC Worldwide? Add it to your watchlist by clicking here.


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  • Report this Comment On July 29, 2013, at 4:49 PM, hongchang wrote:

    downgrade or initiate? They are not the same. No wonder you are called "fool"

  • Report this Comment On August 01, 2013, at 7:08 PM, EatMorChikn wrote:

    YRCW is another example of "TOO BIG TO Fail"! The #1 and #2 frieght carriers in the U.S. merged! But, the Union has consistantly taken consessions to keep the company afloat! (They know what will happen if the company files for BK!)The management has done several revesre splits to keep this stock "Alive"! (Even tried to acquire ABF) On the other side U.S, Holland is the non-union side of YRCW! Only time will tell whether YRCW goes down the same path as Trans Con, Campbell 66, Lee Way etc. etc.!!!!

  • Report this Comment On August 01, 2013, at 7:17 PM, EatMorChikn wrote:

    Btw: I once heard the only reason a freight company might actually "Fear" the Union and a "Strike". Was that the interruption in "Cash FLOW" might actually prohibit the "(Re)Start Up" of the Company and the ability to recover from the "LOSS OF Confidence" of the shippers/customers!

    (Unions Beware!!!!)

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