Cooper Tire & Rubber
Consumer Goods | United States
WSD Target Price
Annualized Return Since Publication
Target Equity Value (Δ)
Source: Bloomberg end of day market data; not adjusted for dividends (August 3, 2016).
Returns assume a long investment position on the date that WSD Capital Management published its thesis, and an exit on the date that the WSD Target Price is realized.
Returns do not reflect any fees, expenses or taxes.
The returns are hypothetical and do not reflect the actual results of WSD Capital Management’s investment activities, nor is it necessarily indicative of future results of WSD Capital Management’s investment activities.
Cooper Tire & Rubber Company (“Cooper Tire”) is the parent company of a global family of companies that specializes in the design, manufacture, marketing, and sale of passenger car and light truck tires.
WSD Capital Management announced its investment in Cooper Tire on August 4, 2016. We were attracted to the company due to the well-established and trusted brand, strong focus on replacement segment, and favorable supply/demand backdrop for margin expansion and revenue growth.
While the challenging commodity price fluctuations will continue to burden industry participants, we believe crude oil prices are destined to revert to a downward trend due to an unfavorable supply/demand backdrop and chronic glut that will enhance margin expansion and revenue growth going forward. In the case of the company, we foresee tailwinds that go beyond just the margin benefits of lower crude oil prices within the tire manufacturing supply chain. The company’s position with the replacement tire segment should generate a favorable uptick in demand as low-priced gasoline fuel an increase in more miles traveled.
In February 2017, the company announced an increased and extended $300 million share repurchase program through December 2019.