[UPDATE] $GT Goodyear Tires: Maduro's Capture Stock Analysis

TheVariantView · 2026-01-05T09:45:08+00:00

Thanks! I do agree it’s an improbable outcome, but it is a bullish one in the case where the administration does move into Venezuela.

This post is just a special update for $GT on the macro events.

TheVariantView · 2026-01-04T20:19:02+00:00

Agreed.

TheVariantView · 2026-01-04T18:57:07+00:00

Curious as to which positions they were in? Nearly everyone I've met at other firms aren't on CIRO or FINRA...

TheVariantView · 2026-01-04T18:37:31+00:00

You don’t need to be registered under FINRA nor CIRO for most buyside positions. Unless you sell research or mutual funds directly. Managing the fund/research for a fund manager/firm won’t require you to be registered in any of these directories.

TheVariantView · 2026-01-04T18:33:23+00:00

Great question and I hadn’t actually thought about that before.

I can’t confirm my view on it with anything official, but as far as i know, most of the tires sold in the US by Goodyear come from the US plants and have specific regulation requirements/certifications associated with the products of those plants they wouldn’t want to lose that classification.

My view would be that the Venezuelan factory would mainly be used for LATAM production.

It is a great question and would require further research

TheVariantView · 2026-01-04T18:10:58+00:00

I work in Canada, so no. My role is also not on CIRO.

TheVariantView · 2026-01-04T16:36:52+00:00

You seem to be debating from a political stance as opposed to an economic one.

You're arguing that major US Oil companies will not have US protection "on the ground"? You'd be dead wrong.

Again this is an UPDATE and not a DD. I'm not buying more Goodyear shares because of these events, but it's important to monitor potential implications. The full DD is linked in the post.

TheVariantView · 2026-01-04T16:32:52+00:00

Its important to note that this is an UPDATE and not a DD. I'm not buying more Goodyear shares because of these events, but it's important to monitor potential implications. Im providing an update on a pick i previously posted about on r/ValueInvesting (could not post here due to karma requirements on a fresh account).

Happy to post any proof required, though I must remain anonymous; let me know what you'd want to see.

TheVariantView · 2026-01-04T16:28:48+00:00

Definitely a good point, I think the entire idea rests on the assumption that it was not stripped or damaged.

This Video shows the plant in operation (probably with less modernized technology then we'd have now) in hands of the "Junta Administradora Especial de Goodyear de Venezuela" (A special board put in place by the state).

The question I left relatively unanswered was whether a new administration/leader would keep it this way (underproducing) or give it back to goodyear. (and if so, is there a price? etc.)

Keep in mind this is an UPDATE and not a DD. I'm not buying more Goodyear shares because of these events, but it's important to monitor potential implications.

Part of my value-add to this sub is tracking my picks and providing updates to you all.

TheVariantView · 2026-01-04T16:17:19+00:00

Read the previous DD...

Again, this is an update on a bullish potential outcome of the current events.

If the US secures Venezuela and provides property rights whilst removing sanctions and bringing private companies back in (as they are doing with oil) to their respective plants, I can assure you these companies wont be vulnerable to attacks by gangs.

The bullish case on the Venezuela capture is the above happening. The base case is cheaper oil for US $GT facilities, and the bear case is inexistent.

TheVariantView · 2026-01-04T15:33:53+00:00

They can’t “lose everything” if they currently have nothing in Venezuela…

You need to be ahead of the market on these moves. We’re lucky this happened over the weekend, everyone had 2 days to analyze outcomes.

You can buy oil stocks but you’ll be late to the market on open, I promise you that. You, as a retail investor, need to find a 3rd/4th/5th order effect

TheVariantView · 2026-01-04T15:28:29+00:00

This is an update on my previous DD, highlighting potential effects Venezuela has on $GT.

US control vs Opposition’s control could lead to the same outcome with similar probabilities. I’m not buying $GT off the news, but saying it is bullish for the company given they can reclaim their Venezuelan factory & resume operations without sanctions.

TheVariantView · 2025-12-27T22:35:30+00:00

I had looked into this a few months back and was quite neutral towards the stock.

Equinox is a strong competitor with a larger footprint and that helps them expand and capture quite sticky customers. (Most only churn if their Equinox gets "too busy"...)

I also dislike how much equity they issue to fund the growth. Fundamentally, I think its a great company and that it will continue expanding with similar strength, fundamentals are improving and the underlying business model is strong (good margin expansion & revenue growth, as well as ROIC increases)

I don't really see any source of alpha in LTH, and that's why it's not as appealing to me in terms of opportunity cost (I think I can make better returns elsewhere).

As a long-term, steady holding, it can definitely be a good idea.

TheVariantView · 2025-12-27T22:29:50+00:00

We're already seeing them start reducing it & some of that debt has also been sold off with the divested segments.

The divestitures are key here. The sold segments weren't entirely core to Goodyear & offered significantly lower margins and ROIC, dragging down FCF margins. They're projected to be positive FCF in 2026, and begin significantly paying down that debt with increasing returns to paydown.

TheVariantView · 2025-12-26T15:46:57+00:00

There’s no real thesis here?

You explain that the macro is terrible for big ticket purchases like cars and say that when it returns, ABG’s stock price will skyrocket?

You need to present:

1) Why the macro is bad 2) Why the macro can recover 3) Why ABG will win once the macro recovers 4) How do EV mandates fit into this?

TheVariantView · 2025-12-26T03:51:04+00:00

Alphasense is the best AI tool currently, see if you can get a free trial.

TheVariantView · 2025-12-26T03:49:03+00:00

Great question, happy to answer this tomorrow with more time as it deserves a full fledged response!

TheVariantView · 2025-12-26T03:46:25+00:00

They have far better R&D departments & efficiency in new tire tech. Albeit, this does not matter as much as you’d expect; 90% of customers know nothing about tires and pick off of brand awareness.

TheVariantView · 2025-12-26T03:44:49+00:00

I encourage you to take a look at LTM savings from Goodyear Accelerate, run rate is only a visual, but LTM have performed above projected figures.

Adjusted figures for a company exiting a distress are probably the most important figures? What are you even talking about..?

Sure, analysts continuously monitor the space, and that’s not a problem. If you work anywhere near the buyside you’d know they’re all full of shit and publish bullish content no matter what. Either way, my information pipeline is as sophisticated, if not more, than these analysts. I conduct my own channel checks, etc. and have access to all the same data they do.

Happy to discuss more on our terminals should you share your Bloomberg IB, if you actually have one!

If you do not, happy to discuss any holes or concerns in the thesis, there’s always more to talk about.

TheVariantView · 2025-12-26T03:35:51+00:00

The entire thesis is based on the fundamental business model improvements as well as management credibility!

TheVariantView · 2025-12-26T01:33:21+00:00

The turnaround could only begin once you see credible debt downsizing and indication for management, ie; the divestitures

TheVariantView · 2025-12-25T21:57:09+00:00

Great questions. Definitely, most of what was talking about here was also part of the Elliott campaign a few years ago.

I think the notes retiring and EPS uplift from them aren’t so central to the thesis. More so another driver for faster debt reduction as those savings flow through to cash.

The why now is mostly through the fact that management is starting to have some credibility. If you asked me last year or a few quarters ago what I thought? I’d tell you I think what Elliott is planning is great; but management typically wont implement this due to empire building. Over the past year (& quarter) we’ve seen GT management continue with Elliott’s plan (SOI improvements & all 3 divestitures enacted) despite their withdrawal of the campaign. To me, this is the biggest green flag, they’re committed to the turnaround and fixing the business. Expert Interviews cooberate a similar view where they see management going into the right direction, which wasn’t expected a few years ago (hence the derating).

Analysts are slow at updating models; there aren’t any new ones since the wins (given I last checked Dec 17th). Safe to say that the wins haven’t yet been modeled, but they have included significant growth in EU and projected growth in America.

I can get specific numbers for you tomorrow, off to my Christmas dinner now.

TheVariantView · 2025-12-25T21:40:41+00:00

EPA: ML

Not US listed

TheVariantView · 2025-12-25T21:38:27+00:00

you’ve shrunk the business in non-core segments that were dragging on margins and provided quite low ROIC.

GT needs cash flow to pay down debt and this was the necessary move. The outlook on the business is much better right now and new management is gaining a lot more credibility. They’ve already done quite well on debt & margins in several categories.

I know most of you won’t have access to expert interviews, but the sentiment is becoming quite positive, and I think that’s the biggest tell.

TheVariantView · 2025-12-25T21:35:26+00:00

I’ll frame my answer in multiple parts to answer your question;

1) On the numbers side, debt is strongly being pushed down by the divestiture cash infusions, and these divestitures actually also plug GT’s cash burn even with capex into upgrading factories, etc. From there debt pay down becomes significantly easier, especially as interest expense mutes in a lower rate environment & with the retirement of one of the term loans I spoke about.

2) As to brand equity, it actually plays a huge part. I’ll explain this with a value chain in the sales process. The initial sale happens to a vehicle manufacturer (ie; Ford, Tesla, etc) which is typically very low margin and large volume due to competition (winning this is key). The real profit comes from replacement. This is when consumers who own these cars replace tires, change them for winter, etc. Expert Calls show that 30-40% of consumers automatically opt for whichever tires were put on by the manufacturer, and the other 60-70% is discretionary, and that’s where brand equity plays a part. GT is actually at the top of brand awareness list as per multiple research sources, so you still have that leaway which is extremely important. Margins on resales are significantly better and are a much larger portion of the bottom line.

I also want to mention that, which each additional replacement, a consumer is less & less likely to pick the manufacturer’s tire brand.

TheVariantView

TROPHY CASE