Ringing the NASDAQ opening bell November 23, 2007 YRC Worldwide (Yellow,Roadway, USF)
"When the markets change, follow their lead" -
From: Todays Financial News
This comes from a blog put together by a company looking to promote investment strategies.
I take the advice with a grain of salt, but hey, facts are facts.
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"The company’s executive team has done a good job so far. It has created sale-leaseback contracts that create greatly needed short-term cash flow. YRC recently sold some of its facilities for $159 million. It will now lease them at a price of $21.2 million annually.
That’s is the equivalent of selling your house and renting it back from the new owner. The cash in your bank account is more valuable than the asset on your personal balance sheet."
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When a big company looks to put cash on their balance sheet it looks stronger to possible investors, when a smaller company does it, it looks good to banking institutions and creditors.
Sale-leasebacks can be performed on a myriad of assets as well, not just property and facilities, but equipment and other assets as well. This can be beneficial for any company "feeling the credit crunch," and seeing as how YRCW stock prices are at their lowest point in some 40 years, this credit crunch is corporate size-comprehensive.
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