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Hawk’s Nest

Small-Cap Transport Services Company Draws Bullish Put Sales

by | Mar 22, 2022

Yellow (YELL) intriguing small-cap that has pulled back after a hot run to end 2021 and on Monday saw 1000 October $10 puts sold to open for $3.10, willing buyer of stock near the recent lows. YELL is a $417M provider of transportation services in the US including LTL shipments and supply chain solutions to transport industrial, commercial, and retail goods. The company was formerly known as YRC Worldwide (YRCW) and has a number of customer-specific logistics solutions that include residential and warehousing. The company has been focusing on optimizing routes, improving efficiency in pickup & delivery (P&D), building out more regional net-day services and expanding their tech platform. YELL sees their transformation on schedule for completion in 2022 and starting to see improvement in financials as soon as mid-year. Shares trade 8.45X earnings, 0.1X sales and 1.35X cash. Stephens has a $15 PT for shares. They think we’ll see ‘more of the same’ in 2022 with respect to pricing and demand. LTL contract pricing to be up a healthy 5.5% this year and underlying demand trends should continue to be very healthy.