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Goodyear Tire & Rubber: Normally Just A GDP Grower, But Significant Upside With Activist's Entrance
Summary
- Goodyear shareholders have experienced abysmal returns for nearly two decades, and the current management team appears to be as entrenched as ever.
- Activist investor Elliot Management has acquired a 10% stake in Goodyear and plans to appoint five independent directors, though given the company’s annual meeting is next Spring, it is likely they settle before.
- While Elliott Management’s investment horizon is not long-term, their plan to improve margins, better monetize the company’s retail stores, and pay down debt will be beneficial for shareholders.
- Even though the business will be nothing more than a GDP grower long-term, its current dirt-cheap valuation—combined with an activist pushing for change—warrants the attention of value and event-driven investors.
Stan is an opinion writer for Shareholder Vote Exchange, Inc., the world’s first marketplace for trading shareholder voting rights. The majority of retail investors don't vote their shares--and for good reason. Individually, it's not rational to spend time looking at ballot items when that time could be used to analyze the company itself. Besides, an individual's couple hundred or thousand shares is unlikely to make a difference. That's why Shareholder Vote Exchange was created. Shareholder Vote Exchange is a platform for investors to sell their shareholder voting rights while keeping their economic ownership in the stock--you are selling *only* your voting rights. To generate incremental returns on the stocks you already own, consider signing up and verifying your shareholder voting rights for sale on Shareholder Vote Exchange. For interested parties, check out https://svegroup.com/hello [Disclaimer: as a Contributing Writer for Shareholder Vote Exchange, Stan is associated with existing author Preston Yadegar, co-founder and CEO of SVE. Stan's opinions do not necessarily reflect that of SVE’s, and Stan has editorial independence of the content that he writes.]About Stan:Formerly, I worked as an equity analyst covering REITs and regional banks at a sell-side shop based in Chicago. I also have experience working with quantitive strategies, as I spent several years at a prop shop that traded high-frequency strategies. Researching and investing in high-quality companies is an avid hobby of mine, and one which I hope to share with others. Above all, I am a fundamentals-based investor in industries I understand and in companies which I feel like I have a competitive advantage in. These tend to be software and consumer-facing companies, but often include small caps as well. Value with sound fundamentals + Growth at a reasonable price are my go-to themes. 95% long-term buy & hold, 5% dabble in other (options, special situations) I am also interested in special situations investing, value investing, market microstructure, and learning/writing about specific niches in the financial markets. Call me Stan (or Steve, whichever you prefer).
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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