One thing to keep in mind when buying a company’s stock is the lifespan of its product. In other words, keep an eye on how often consumers have to buy replacements. If people have to buy your product only once, you are on a constant search for new customers. Unless, that is, you’re satisfied with sporadic sales.
And that is the beauty of Goodyear Tire and Rubber (GT) – a company that has been based in Akron, OH since 1898, when Frank Seiberling started producing bicycle and carriage tires, horseshoe pads, and poker chips.
Goodyear’s product wears out and needs to be replaced – as often as every year in some cases, and every few years in almost all cases. If you drive a car, at some point you will need new tires. And in a country that loves to drive (even with gas hitting $4 a gallon), that is a lot of tires that need replacing.
Looking at Goodyear’s chart, it appears the stock has found a support level at around $26, which makes a nice entry point. My recommendation: Buy Goodyear Tire and Rubber up to $30/share.[Ed. Note: Christian Hill is the resident Research Analyst for Investor’s Daily Edge (IDE). Get more clear recommendations and practical strategies for protecting your portfolio and multiplying your money from Christian and the rest of the IDE team. Sign up here.]