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 trucker YRC Worldwide
So what: The embattled trucker has been whacked around quite a bit by Mr. Market as it tries to regain its footing and show lasting viability. The primary issue? A hefty debt load that threatens to send the company to bankruptcy if it can't get its cost structure under control and return to profitability. Recent news has provided a glimmer of hope as the company reached a tentative agreement with the International Brotherhood of Teamsters. A reverse stock split also kept the shares from being delisted. But stock market action suggests investors are still wary -- the stock has lost more than 40% since Sept. 29.
Now what: There's a very real business backing up YRC's stock, and if the company can successfully navigate its turnaround, investors could be seriously rewarded. But turnarounds are never a cakewalk, and a limping economy is certainly no help. For investors looking for a highly volatile bet, I think YRC has some merit. However, investors looking for a solid, reliable investment are best off looking elsewhere.
