'Stay tuned for more good news on 2H07,' says Ludwig
"Who would have ever thought it possible? Through mid-August, the U.S. tire stocks (Goodyear Tire & Rubber Co., Cooper Tire & Rubber Co. and Titan International Inc.) have been the best performing industry group on the New York Stock Exchange!" says tire industry analyst Saul Ludwig in the September installment of the "Ludwig Report" in Modern Tire Dealer magazine.
"Together, they have increased 44% year-to-date vs. the S&P 500 increase of 0.6%. Additionally, Michelin is up 35% and Continental is up 20%. And that's despite surging raw material costs and a continuous flood of low-cost tires into our country.
"By closing several high-cost plants," Ludwig notes, "the tire manufacturers have better operating rates and better pricing. That leads to higher profits, and that leads to higher stock prices.
"Stay tuned for more good news on 2H07, in my opinion."
Ludwig is a managing director with KeyBanc Capital Markets Inc. based in Cleveland, Ohio. Look for the full "Ludwig Report" in the September issue of Modern Tire Dealer magazine.