Max Mitchell, a director at The Goodyear Tire & Rubber Company (GT), recently bought 25,000 shares. The buy increased his holdings by 60%, and came to a total cost of $194,000.
Two other directors bought around the same time, each making an initial buy. One bought 31,408 shares for $252,206. The other bought 26,000 shares, shelling out $205,400.
Overall, Goodyear insiders own 0.7% of shares.
The producer of tires and other rubberized products is down 34% over the past year. Vehicle sales have slowed, a big component of tire sales. Earnings are off, and revenues at Goodyear dropped 6% last year.
Even with that drop, however, shares trade at 8 times forward earnings, a significant discount to the overall market. And shares trade at half their book value, and just over 0.1 times their price-to-sales ratio. Both indicate that shares may be a value play here.
Action to take: Shares hit a 52-week low in early August, and could be in the early stages of pushing higher. Speculative investors may want to buy a small stake here for low double-digit gains in the months ahead. At current prices, Goodyear does not pay a dividend.
For traders, call options look inexpensive here as a rebound play. The January 2025 $9 calls, last trading for about $0.85, could see high double-digit returns if shares continue to recover from their recent selloff.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
