Max Mitchell, a director at Goodyear Tire & Rubber (GT), recently bought 42,000 shares. The buy is a new stake for the director, and the total cost of the buy came to $510,300.
This marks the only insider buy over the past two years. One company EVP was a seller on two occasions last September. Otherwise, there have been no other insider transactions or buys or sells from major funds in the past two years.
Overall, Goodyear insiders own about 0.5 percent of shares.
The manufacturer of tires and other auto parts is up 10 percent over the past year, lagging the overall market. That’s in spite of a 5 percent drop in revenue and a lack of full-year profits.
While those returns have been lackluster, shares trade at a 25 percent discount to their book value. And Goodyear shares trade at less than 10 times forward earnings.
Action to take: While the auto parts space can be cyclical, shares may be well positioned for a long-term rally from here in the months and even years ahead.
While investors may need some time for the automotive cycle to play out, Goodyear does not currently pay a dividend.
For traders, the July $14 calls, last going for about $0.75, could see mid-double-digit returns in the months ahead.
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.