It’s not a good time to be a trucker these days. All of the headwinds these companies are facing are enough to give executives recurring nightmares. Unfortunately for them, the tough times will continue for the foreseeable future. Here is a short recommendation from the group:

YRC Worldwide (YRCW) is a transportation company that moves industrial, commercial, and retail goods in the U.S. and abroad. Basically, all parts of the economy affect the company’s fortunes.

The stock has actually been performing decently of late on hopes for a turnaround and improvement in industry conditions. Back in April, the stock jumped over 30% in one day on hopes that results would improve. We think this optimism is premature for several reasons.

For one, oil literally hits a new high everyday. There is no chance that crude at these levels is baked into current earnings estimates. At the time of this writing, oil was touching $146 per barrel. Obviously, gas prices are a huge cost for a trucking company.

Second of all, turnarounds take a lot of time to take hold and are never a smooth ride. Its latest earnings report was a disaster. It missed estimates by over 140%, coming in at a loss of 53 cents per share. Needless to say, earnings estimates have been slashed. Over the past 90 days, this year’s estimates have been halved to 78 cents per share.

The stock is trading at relatively cheap valuations, but they are likely to get cheaper before they bottom. Management is in cost-cutting mode, so it is unlikely that any growth will occur in the near future. We see downside to the $10 level if conditions worsen.

Suggested Stop: $16.22