Displaying items by tag: tires

(New York)

One of the best ways to pick stocks is to look at insider purchases. When those in-the-know on a company are buying stock with their own money, it is a probably a good time to pay attention. Well, one well-known but dormant stock (in terms of insider purchases) just saw a significant move—Goodyear. One of the rubber company’s board members just spent about $650,000 to buy 35,000 shares of the company. There has not been an insider purchase that large at Goodyear since at least 2004.

FINSUM: We obviously don’t know the catalyst for this buy, but the chatter about how tire companies will benefit in the long-term from self-driving cars (i.e. more miles driven because it is cheaper to keep the cars moving than park them) seems like a strong fundamental.

(New York)

Technology, trade wars, and social attitudes are changing the world and economy rapidly. How can investors adapt their strategies to keep up and “future proof” their portfolios? Well, Barron’s has run a piece doing just that. The stocks chosen include: Bridgestone, BNP Paribas, Lix, Dabur India, and Bharti Infratel. Bridgestone, a Japanese tire company, seems as though it would be hurt by tariffs and the rise of Uber. However, the opposite is the case, as most tires are made close to where they are sold (so no tariffs), and the rise of Uber and self-driving cars will actually increase the most important performance metric for tire companies: miles driven.

FINSUM: We wrote an article espousing tire makers a few months ago but we like the view even better now. No matter who, or what, is driving a car, rubber will still meet road, meaning tires will be in demand. Further, since parking for self-driving cars may be expensive, we can imagine fleet operators keep them driving around 24/7, increasing demand for rubber.