5 Corporate Giants at Wholesale Prices

Giant #5: YRC Worldwide Inc. (YRCW)

Transportation companies were in a world of hurt when oil prices were skyrocketing during the first half of 2008. For a period, those higher prices were offset by a booming economy. Unfortunately, though, that economy was already slowing at a time when commodity prices were surging. It was a double whammy for any business that relied on crude for its operations.

Nowhere is that truer than in the case of the trucking business. One of my favorite names in that space is YRC Worldwide Inc. (YRCW). Its shares have fallen from the low $20s to the bankruptcy level of just over $1 per share.

Even though oil prices are now down, the future of YRCW is in doubt due to high levels of debt. More importantly, the economy is now contracting to the point whereby revenues in the future will be substantially lower.

These are short-term issues that I feel can be resolved. The company negotiated wage cuts with its Teamsters union and is doing what it can to stay solvent.

There is no dividend, so the risk is a bit greater than the other stocks mentioned here. That said, I see this company as a survivor when the economy does recover. If so, investors at today’s $4 price could see significant appreciation as a result.