Are These Impressive Comeback Stocks A Buy? By Brian Nichols - May 21, 2013 | Tickers: GREK, NBG, YRCW | 0 Comments Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited. In this article I am looking at a unique duo of stocks, those that are trading with mindboggling multi-year losses but have shown recent strength to produce great short-term returns. The goal is to look at each without bias, and determine if there is any value to these recent breakouts. The Little Engine that Could After YRC Worldwide (NASDAQ: YRCW) posted its Q1 earnings, resulting in its stock doubling, I was very critical and questioned the upside of this company. After taking a closer look, I still have questions, but not as to whether or not upside potential is present but rather if fundamentals improvements are sustainable. YRC Worldwide has had a good May, returning gains of 150%, but is still lower by 99.66% over the last five years. Therefore, YRC Worldwide was at its lows of lows, and as I assess the company it’s not fair to seek operational perfection without red flags, but rather upside based on a stock that has lost more than 99% of its value. Here are the facts: The company has improved its operating income by $58.5 million year-over-year during Q1; its bid to buy Arkansas Best would give the company a growing and profitable segment with good synergy; and the stock is VERY cheap! YRC Worldwide has already gone through all the fears surrounding bankruptcy and has appropriately lost the faith of most shareholders. With that said, the same rules apply to a company such as YRC Worldwide as to other companies I like such as Rite Aid; they are so cheap that all it takes is very minor operational improvements to create massive upside. YRC Worldwide trades with a market cap of $165 million and sales of almost $5 billion, making its price/sales ratio 0.03! This is unprecedented in the market, and in an industry that trades at 1.30 times sales. Because it is so cheap, if YRC Worldwide can continue to improve it could very likely become the best performing stock in the market for a number of years. In my opinion, its upside is worth a very small risk following Q1 earnings. http://beta.fool.com/briannichols/2013/05/21/are-these-impressive-comeback-stocks-a-buy/34669/?source=eogyholnk0000001
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