The Goodyear Tire & Rubber Company (GT) Investment Report:

Future Investor,
I have thoroughly reviewed the stock you requested me to, The Goodyear Tire & Rubber
Company, in order to gauge whether or not you should buy, sell, or hold the stock To begin, I
will give you a brie! description o! the !irm as well as the industry
The Goodyear Tire & Rubber company speciali"es in a multitude o! di!!erent services
and merchandise items I#m sure you#ve seen a Goodyear garage shop somewhere or another
They have thousands and thousands o! these garage shops across the nation and at these shops,
they sell various miscellaneous products !rom car oil to windshield wipers They don#t only stay
within the automobile sector They provide planes with wheels as well as trucks They even
produce truck !laps The company#s main operation is the business o! selling tires and rubber
Goodyear Tires have e$panded into other nations as well and is headquartered in %kron, &hio
Founded in '()(, Goodyear is a staple garage shop at many towns in cities in the *nited +tates
For comparative purposes, I will be comparing all o! the data t the +&, -.. inde$ The
speci!ic sector GT is in is the Consumer Goods sector but they are speci!ically in the Rubber &
,lastics industry Today#s change in the Rubber & ,lastic Industry was /.'01 compared to
/.0.1 which was today#s change !or the +&, -..
I have been looking at the daily prices !or the past month since &ctober '(
th
, 0.'2, when
the price was 00-( Today, the price is 0'3( For +&, -.., the price today is more than the
price it was on &ctober '(
th
, 0.'2 &ne thing to notice is the volume o! shareholders !or
Goodyear &n &ctober '(
th
it was at 3,.)(,).. holders compared to 0,4(3,3.. holders The
number o! holders peaked on &ct 0)
th
, 0.'2 There was a dividend o! .- paid on &ct 2.
th
and
the number o! shareholders declined by more than -.1 a!ter the dividend was paid out
5ere is some data !or Goodyear
Valuation Measures
6arket Cap 7intraday8
-
9 -03:
;nterprise <alue 7=ov '), 0.'28
2
9 )2):
Trailing ,>; 7ttm, intraday89 '3.2
Forward ,>; 7!ye ?ec 2', 0.'38
'
9 @-(
,;G Ratio 7- yr e$pected8
'
9 .0@
Return on %ssets 7ttm89 32)1
Return on ;quity 7ttm89 0'2.1
5ere is some data !or the industry and sector
Description
Day
!rice
Chan"
e #
Mar$et
Cap
!%&
R'
& #
Div(
)iel
d #
*on"
+
Term
Debt
to
&,uit
y
!rice
to
-oo$
Valu
e
.et
!ro/it
Mar"i
n #
(mr,)
!rice
to
0ree
Cash
0lo1
(mr,
)
2ector: Consumer Goods '32
030-043
':
')0
4
''4
'
0-0
'.(.
(
03( -.' /@(-
Industry: Rubber & ,lastics
76ore In!o8
/.') @04@:
0'-
.
'4)
.
'.. @)24
''@-
-
0-.
/
0-0.
The ,>; !or Goodyear is '3.2 which is a solid ,>; It is better than the +ector ,>; at ')04 and
the Industry ,>; at 0'- :ased on the ,>; anomaly, a lower ,>; is better than a larger one =e$t
we can look at the Return on ;quity '.1 is a good minimum benchmark so based on that, we
can clearly see that Goodyear is doing better than '.1 at 0'21 This is signi!icantly better than
the +ectors R&; which is at ''4'1 and the Industry R&; which is at '4).1 Ae can also look
at ?ividend Bield %lthough the ?iv Bield is not represented !or Goodyear in the data above, it
is currently at .0 compared to the sector#s 0-0 and the industry#s '.. This may be an
indication as to why so many people sold their shares a!ter the dividend was paid at month#s end
o! &ctober %nother indication might be the return on assets which !or Goodyear was only
3)21 6y personal benchmark is at least '. 1
%nother thing we must notice about this particular !irm#s beta %ccording to <alue Cine,
it has a beta o! '@- compared to the market which is at ' I conclude that this stock is a riskier
one The <alue Cine timeliness, an important statistical tool, tells us how the stock is e$pected to
per!orm in the ne$t '0 months % rating o! ' is the best and Goodyear has received a rating o! '
These statistics seem consistent with some basic !inancial concepts The more risky a stock is,
the more one will either gain or lose It is evident that that is likely the case here !or Goodyear
&verall, my recommendation would be to buy and hold Bou must always remember that
being patient is one o! the most important rules in investing +hareholders don#t make a year#s
income overnight I personally don#t mind the riskiness o! this stock The riskiness o! it may be
the cause o! the prices decline however, with a timeliness rating o! ' !rom <alue Cine, I predict
the riskiness will produce some high returns within the ne$t '0 months