GT (Update)

Goodyear Tire & Rubber Co

Industrial/Transportation


Presented:01/15/2014
Price:$25.42
Cap:$6.28B
Current Price:$8.28
Cap:$2.36B

Presented

Date01/15/2014
Price$25.42
Market Cap$6.28B
Ent Value$11.61B
P/E Ratio3.02x
Book Value$13.40
Div Yield0.9%
Shares O/S246.90M
Ave Daily Vol3,730,000
Short Int5.52%

Current

Price$8.28
Market Cap$2.36B
The Goodyear Tire & Rubber Company develops, manufactures, distributes, and sells tires and related products and services worldwide. The company offers various lines of rubber tires for automobiles, trucks, buses, aircraft, motorcycles, farm implements, earthmoving and mining equipment, industrial equipment, and various other applications. It sells tires under the Goodyear, Dunlop, Kelly, Debica, Sava, Fulda, and various other Goodyear owned house brands, as well as under the private-label brands. The company is also involved in retreading truck, aviation, and off-the-road tires; manufacturing and selling tread rubber and other tire retreading materials; providing automotive repair services, and miscellaneous other products and services; and manufacturing and selling flaps for truck tires and other tires. In addition, it manufactures and markets chemical and natural rubber products. The company operates approximately 1,300 tire and auto service center outlets, where it offers its products for retail sale and provides automotive repair and other services. The Goodyear Tire & Rubber Company was founded in 1898 and is headquartered in Akron, Ohio.

Please note, this is an update to LONG — Goodyear Tire & Rubber Company (GT) presented on 6/12/2013 which is an update to LONG — Goodyear Tire & Rubber Company (GT) originally presented on 8/9/2012.

Highlights

Today, Goodyear (GT) is the presenter’s third largest position and he believes the investment case is more straightforward than it was in June, 2013. Given the trajectory of earnings and his current assumptions for price and volume, GT has the potential to reach $4 of EPS in 2015. Carrying his previous multiple assumptions – which proved to be accurate – forward suggests GT shares should trade at 9x-10x his forward estimate, or as high as $40 by year’s end.

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Idea Discussion

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