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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (24906)	9/28/2006 2:36:39 AM
From: Paul Senior	Respond to of 78768

YRCW also have a fuel charge program. From the '05 annual report: "The fuel charge is common among our industry and represents an amount we charge to customers that adjusts with changing fuel prices. We base our fuel surcharge on a published national index and adjust it weekly. Material changes in the index or our cost of fuel can positively or negatively impact our revenue and operating income." (aside: I assume because fuel surcharges - rates/amounts/caps are negotiable items in the contracting process with customers) "Fuel surcharge is an accepted and important component of the overall pricing of our services to our customers." Regardless, it would seem that if fuel prices do decline, that that would have positive effect on volume of shipments, and if media and investors ask, "Who benefits from lower fuel prices?", among the first, quick, and easy answers would be transportation companies. So I do agree that lower fuel prices could/should/might mean higher stock prices for companies like YRCW- at least for a quick pop or in the short term. I haven't tracked it closely, but it often seems to me on days when oil stocks are up, the transportation stocks I have - rail and truckers - will move down. And similarly, the transport stocks move up when oil stocks are dropping. There's not as much volatility with these truckers&railers as there is with the oil stocks though (it seems). Still, I often get the feeling I'm playing roulette and betting both black and red at the same time. Given the broad diversity of stocks in my portfolios, I expect this, but I'm not so comfortable with it. (To a lesser extent, I seem to be seeing that negative correlation too between oil stock prices and retail stocks.)

To: Spekulatius who wrote (24906)	9/28/2006 2:53:34 AM
From: Grommit	Respond to of 78768

energy and freight. what you say sounds good, in theory. i could not plot yellow stock price vs. gas prices directly, so i just picked 3 energy companies at random, and plotted them against yellow. (you should click on 5 year chart also). they moved in step until Q1 2005. so maybe not a lot of neg correlation due to energy prices. in fact, oil prices are DOWN over the past month and yellow is not UP. finance.yahoo.com also, i would not say that yellow is excessively cheap now. the PE is low, but so is the expected future earnings growth. but, if they can pull off profitable expansion plans, it may be cheap now. they have some efforts at china expansion, i believe.