Were Expert Investors Right About The Goodyear Tire & Rubber Company (GT)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought The Goodyear Tire & Rubber Company (NASDAQ:GT) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

The Goodyear Tire & Rubber Company (NASDAQ:GT) has experienced an increase in activity from the world’s largest hedge funds in recent months. The Goodyear Tire & Rubber Company (NASDAQ:GT) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. There were 33 hedge funds in our database with GT holdings at the end of June. Our calculations also showed that GT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a look at the new hedge fund action regarding The Goodyear Tire & Rubber Company (NASDAQ:GT).

David Tepper of Appaloosa Management LP

Do Hedge Funds Think GT Is A Good Stock To Buy Now?

At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the previous quarter. By comparison, 24 hedge funds held shares or bullish call options in GT a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Appaloosa Management LP, managed by David Tepper, holds the biggest position in The Goodyear Tire & Rubber Company (NASDAQ:GT). Appaloosa Management LP has a $92 million position in the stock, comprising 2.2% of its 13F portfolio. On Appaloosa Management LP’s heels is Steve Cohen of Point72 Asset Management, with a $74.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, Alexander Roepers’s Atlantic Investment Management and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to The Goodyear Tire & Rubber Company (NASDAQ:GT), around 10.56% of its 13F portfolio. Appaloosa Management LP is also relatively very bullish on the stock, earmarking 2.19 percent of its 13F equity portfolio to GT.

As aggregate interest increased, some big names have jumped into The Goodyear Tire & Rubber Company (NASDAQ:GT) headfirst. Atlantic Investment Management, managed by Alexander Roepers, initiated the most valuable position in The Goodyear Tire & Rubber Company (NASDAQ:GT). Atlantic Investment Management had $31.4 million invested in the company at the end of the quarter. Leon Shaulov’s Maplelane Capital also initiated a $14 million position during the quarter. The other funds with new positions in the stock are Len Kipp and Xavier Majic’s Maple Rock Capital, John Bader’s Halcyon Asset Management, and Gregg Moskowitz’s Interval Partners.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as The Goodyear Tire & Rubber Company (NASDAQ:GT) but similarly valued. These stocks are Alkermes Plc (NASDAQ:ALKS), Antero Midstream Corp (NYSE:AM), LHC Group, Inc. (NASDAQ:LHCG), ICU Medical, Inc. (NASDAQ:ICUI), AllianceBernstein Holding LP (NYSE:AB), Kodiak Sciences Inc (NASDAQ:KOD), and Webster Financial Corporation (NYSE:WBS). This group of stocks’ market valuations are closest to GT’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $495 million. That figure was $449 million in GT’s case. Alkermes Plc (NASDAQ:ALKS) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks The Goodyear Tire & Rubber Company (NASDAQ:GT) is more popular among hedge funds. Our overall hedge fund sentiment score for GT is 88.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on GT as the stock returned 17.1% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.