Cooper Tire and Rubber is a dramatic turnaround.March 06, 2007 | Comments : 0 Recommended this article: (0)
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Cooper Tire & Rubber Company specializes in the manufacture and marketing of automotive products. Products for Cooper's Tire Group include automotive, motorcycle and truck tires, inner tubes, tread rubber and equipment. In the Automotive Group, Cooper is an original equipment supplier of sealing, trim, NVH control systems and fluid handling systems for the automotive industry in North America, Europe and South America.
On Mar 1, Cooper Tire reported fourth-quarter earnings at 33 cents per share, a 1,200% positive surprise above analysts expectations. Net sales increased 29% to a new quarterly record. This was CTBs second straight quarterly positive earnings surprise.
Cooper Tire has been in either a long-term downtrend or an intermediate uptrend, depending on your timeframe. CTB topped out at $25.42 on May 10, 2002. From that point, CTB gave up nearly 70% of its value falling all the way down to $7.71 on Aug 10, 2006. Since then the stock has rallied 141% to Fridays close of $18.63.
CTB is an example of a dramatic turnaround story. Visibly on the chart, this is a clear example of a V formation bottom. True V formations are rare, as companies rarely have dramatic changes in fortune. In CTBs case, the company went from a history of missing analysts consensus estimates to two consecutive quarters of positive earnings surprises. Usually this type of a V bottom is a very potent indicator, visual evidence of a dramatic turnaround in the companys fortunes.
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