Cooper Tire & Rubber Company (NYSE:CTB)

CAPS Rating: 5 out of 5

The Company is a manufacturer of replacement tires. It focuses on the manufacture and sale of passenger and light truck replacement tires. It also manufactures radial medium and bias light truck tires and materials and equipment.

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Player Avatar bevodelnorte (< 20) Submitted: 11/10/2006 11:32:03 AM : Underperform Start Price: $9.96 CTB Score: -180.17

Cooper's problems of massive overcapacity, inability to pass along price increases, and excessive domestic labor costs combined with raw material costs that have gone through the roof have made it impossible to make money in the tire industry, particularly for Cooper. Cash is only at slightly >$100 MM and did not drop this quarter simply due to a large reduction in finished goods inventory of tires not made in the 3rd quarter. When this inventory is liquidated, the cash hemorrhaging will begin again because costs of tire production make the company's profit picture upside down. Without closing 1-2 plants, it is only a matter of time till the liquidity runs dry.

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