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Trucking stocks * USA - Flattened by economy, excess capacity
tries to reverse decline
Indianapolis,IN,USA -The Indianapolis Business Journal, by Chris O’Malley -December 22, 2007: -- In just over one quarter, shares of Celadon Group lost nearly half their value as profitable cargo got harder to find in a slowing economy. The stock closed at $9.13 on Dec. 19, down from nearly $17 in late August. The stock is down nearly two-thirds from its peak of $22.41 in July 2006, before the industry slump. Celadon isn’t alone: Yellow Freight parent YRC Worldwide, for example, has also been hammered on Wall Street. YRC now trades around $17.50, a steep decline from its 52-week high of $47...
“At these very low valuations for the company, at what point do you entertain the thought of taking the company private?” Oppenheimer & Co. analyst Bruce Olipha asked Celadon’s chairman, Steve Russell, during a recent earnings call. “It’s difficult to answer that question,” replied Russell, mindful that four years ago the stock had tanked below $4 and later grew sixfold. “Let’s see what happens in the months ahead.” Celadon founder Russell, for now, is seeing what his new president—former General Electric trailer leasing executive Chris Hines—can do to put more stuff aboard Celadon’s trucks. Hines, who came aboard in August, didn’t waste any time. In October, he switched Celadon’s 30-person sales force from salaried- to incentive-based compensation... Russell, for one, thinks the company is better positioned to withstand a downturn than it was in 2003, when Celadon’s stock was trading at half of its now-languishing price. Since then, Celadon has improved its systems, technology and footprint... This year, it was named best fleet in America by Fleet Owner magazine. “We’re a much better company than we were then,” Russell said...Labels: trucking stocks
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