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Should I Buy The Goodyear Tire & Rubber Company (GT)?

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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on The Goodyear Tire & Rubber Company (NASDAQ:GT).

The Goodyear Tire & Rubber Company (NASDAQ:GT) has seen an increase in hedge fund sentiment recently. The Goodyear Tire & Rubber Company (NASDAQ:GT) was in 37 hedge funds' portfolios at the end of September. 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. With all of this in mind let's view the new hedge fund action surrounding The Goodyear Tire & Rubber Company (NASDAQ:GT).

Appaloosa Management Lp
Appaloosa Management Lp

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 were bullish on this stock, a change of 12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GT over the last 25 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in The Goodyear Tire & Rubber Company (NASDAQ:GT) was held by Appaloosa Management LP, which reported holding $92 million worth of stock at the end of September. It was followed by Point72 Asset Management with a $74.6 million position. Other investors bullish on the company included Shellback Capital, Atlantic Investment Management, and 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, designating 2.19 percent of its 13F equity portfolio to GT.

As industrywide interest jumped, some big names have jumped into The Goodyear Tire & Rubber Company (NASDAQ:GT) headfirst. Atlantic Investment Management, managed by Alexander Roepers, initiated the largest 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 made a $14 million investment in the stock during the quarter. The other funds with brand new GT positions 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 review hedge fund activity in other stocks similar to The Goodyear Tire & Rubber Company (NASDAQ:GT). 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). All of these stocks' market caps match GT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALKS,35,977556,-1 AM,14,87935,-2 LHCG,22,65204,2 ICUI,31,382085,4 AB,8,42204,-1 KOD,11,1490080,-1 WBS,20,419364,-3 Average,20.1,494918,-0.3 [/table]

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 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on GT as the stock returned 13.6% since the end of September (through 11/30) 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.