Good Year? Try a Good Seven As Goodyear Hits Multi-year High

Goodyear Tire & Rubber Co. shares surged to their highest point in seven years yesterday on news it was selling one of its units for far more than analysts were expecting to private equity investor the Carlyle Group. According to Deutsche Bank analyst Rod Lache, the price Goodyear got for its Engineered Products unit, which produces hoses and conveyor belts, "surpassed our most ambitious assumptions." Lache, who has a 'Buy' rating on the shares, believes the company will use the proceeds to pay debt and help fund a retiree health-care trust, which should add to its bottom line. The sale price was reported at $1.47 billion; shares responded by gaining nearly 5% to $31.76 at market close yesterday on above average volume of 7.33 million shares. Goodyear is up 51% this year, behind only RadioShack in the running for S&P 500's top gainer.

Sources: Bloomberg, MarketWatch (i), (ii)
Commentary: S&P 500 Stocks Furthest Above, Below 50-, 200-Day Moving Averages • Goodyear Strike Punctures Net Income • Cramer's Take on GT
Stocks/ETFs to watch: The Goodyear Tire & Rubber Company (GT). Competitors: Cooper Tire & Rubber Company (CTB), Bandag, Inc. (BDG)

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