YRC Worldwide, Inc. (YRCW), Union Pacific Corporation (UNP): Raise The Yellow Caution Flag

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I think we’re lost
I’m not sure if anyone’s told China yet, but the navigation market is so last decade! Shares of China-based AutoNavi Holdings Ltd (ADR) NASDAQ:AMAP) have soared over the past week on essentially no news despite the glaring fact that its product portfolio is in a highly commoditized and easily replaceable industry.

Stateside, Garmin Ltd. (NASDAQ:GRMN) is seeing many of the issues I project AutoNavi will soon encounter. With mobile coverage spreading into many rural areas, many smartphones and tablets are now able to deliver the same navigation quality and features that Garmin’s and AutoNavi’s products bring to the table. Understandably, China’s wireless infrastructure isn’t as developed as what we have here in the U.S., so the lifespan of AutoNavi’s products will be extended compared to Garmin, which has been on a multiyear downswing. Ultimately, though, the same product replacement cycle is going to hit AutoNavi when China’s wireless infrastructure improves, and will slowly erode its business.

While there could be some value to be had here if the company were to pay a dividend (which it currently does not), after a 30%-plus rally on basically no news I can’t help but be skeptical.

Foolish roundup
This week’s theme is all about longevity. Innovation and commoditization in the technology sector look like big enemies of China-based AutoNavi and Bluetooth headset maker Plantronics, Inc. (NYSE:PLT), while a large debt load and years of losses seem like a perfectly good reason to doubt YRC Worldwide, Inc. (NASDAQ:YRCW)’s future potential.

I’m so confident in my three calls that I plan to make a CAPScall of underperform on each one. The question is: Would you do the same?

The article 3 Stocks Near 52-Week Highs Worth Selling originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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