The Goodyear Tire & Rubber Company (GT): A Good Year for This Stock?

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Ford Motor Company (NYSE:F) for full year 2013 expects industry volume of 16 million units, compared with 14.8 million units in 2012. As well, the company expects its 2013 market share in the U.S. to be higher than 2012.

This should help boost Ford’s total revenue to increase 10% in 2013, thanks to U.S. and China growth. Ford is and should continue benefiting from rapid product introductions. As well, both Ford and GM trade at a discount to their Japanese counterparts. Ford trades at 10 times earnings, GM at 11 times, while Honda is at 19.6 times and Toyota Motor Corporation (ADR) (NYSE:TM) 25 times.

Going into the second quarter, there were a total of 47 hedge funds long the stock, after a 23% decrease from one quarter earlier. Billionaire David Tepper of Appaloosa Management has the largest position in Ford, worth close to $154 million (see Appaloosa’s top picks).

Bottom line

With the rising global vehicle production and expanding global demand for tires, Goodyear could easily be poised for a great year. Compared to Cooper, Goodyear trades a bit more expensive at approximately 17.7 times earnings, with Cooper at 6.3 times. However, when we dig a bit deeper we see that Goodyear is indeed the better value.
Analysts expect The Goodyear Tire & Rubber Company (NASDAQ:GT) to grow EPS at an annualized 41% over the next five years, putting its PEG ratio at a mere 0.2; conversely Cooper’s PEG ratio is 0.9. I see Goodyear as a long-term buy, with solid international growth opportunities.
The article A Good Year for This Stock? originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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