VALUE: After Hours (S07 E42): Goodyear & CarMax Are Great Buys

During their recent episode, Taylor, Carlisle, and Tim Melvin discussed Goodyear & CarMax Are Great Buys. Here’s an excerpt from the episode:

Let me just pull up the actual sheets here, so I can talk from a position of authority. We bought Goodyear Tire and Rubber actually with the $2 billion capital infusion from asset sales. The fact that they make their most of their tires in the United States puts them in a very good competitive position against most other tire companies. Bought some of that before that began its run.

Tobias: And EVs are not a threat to tire companies. If anything, EVs chew tires.

Tim: Yeah, that’s what I’ve heard. I’m not a big tire expert, but Goodyear is an old American company. They were doing everything right, is trying to undo the mistakes of the past. It’s hard for me to find a lot that I want to be really super aggressive about in the United States right now, because the indexes are at ridiculous levels. I don’t care how you cut or measure that.

When a 40-cape ratio was a 40-cape ratio, and when I look at credit spreads, they’re about as tight as they’ve been. They’ve weakened up a little bit. But that’s a lethal combination. You go back through history and you find sub 3% high yield credit spreads and a cape ratio say of over 30, I mean, that’s lethal. So, I’m being very cautious, and it’s got to be super cheap. We bought CarMax when it imploded, just because I love CarMax.

Tobias: [chuckles]

You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:

VALUE: After Hours (S07 E42): Goodyear & CarMax Are Great Buys

Read next