TWI bought off Goodyear's agricultural tire business.
TWI does not hedge primary raw materials costs; namely natural & synthetic rubber
TWI hopes that it can pass off any rise to consumers and make more money on way down
highly unlikely.. NR has gone from $3100 per metric ton in Jan 2012 to $3800 by late Feb 2012.. that is a whopping 22% in just 7 weeks!
market is overbought? think again
Friday Feb 24 2012 session saw natural rubber futures on Shanghai Futures Exchange break through a 12 month DOWN trend line..
natural rubber market is bullish.. auto sales in US is picking up & China is very resilient
one survey mentioned only 5% of China's consumer own auto's; compared to 80% in the US.
to answer Bambolino's question why TWI's stock is still down? it's because natural & synthetic rubber prices will continue to go up and since TWI (ala Winged Foot) does not hedge, then earnings are going to be crimped.
No cost cutting can compensate 22% rise in feedstock prices in 7 weeks!
when the Rubber Meets the Road, TWI & especially Winged Foot stock prices will keep sliding into the road side ditch!
coz unlike Southwest, United, Jetblue, these guys don't hedge
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TWI does not hedge primary raw materials costs; namely natural & synthetic rubber
TWI hopes that it can pass off any rise to consumers and make more money on way down
highly unlikely.. NR has gone from $3100 per metric ton in Jan 2012 to $3800 by late Feb 2012.. that is a whopping 22% in just 7 weeks!
market is overbought? think again
Friday Feb 24 2012 session saw natural rubber futures on Shanghai Futures Exchange break through a 12 month DOWN trend line..
natural rubber market is bullish.. auto sales in US is picking up & China is very resilient
one survey mentioned only 5% of China's consumer own auto's; compared to 80% in the US.
to answer Bambolino's question why TWI's stock is still down? it's because natural & synthetic rubber prices will continue to go up and since TWI (ala Winged Foot) does not hedge, then earnings are going to be crimped.
No cost cutting can compensate 22% rise in feedstock prices in 7 weeks!
when the Rubber Meets the Road, TWI & especially Winged Foot stock prices will keep sliding into the road side ditch!
coz unlike Southwest, United, Jetblue, these guys don't hedge