+ Watch GM
on My Watchlist
The Company is engaged in the worldwide development, production, and marketing of cars, trucks, and parts.
S & P 5 star, 37.54
Focus on quality and margins makes this company totally different from the GM of old.
oversold due to weather impact
GM is one of my high-conviction ideas and a big real money position through TARP warrants, but I've never written a CAPS pitch. So now that their 2013 results are out it's a good time to look at their value proposition.First of all I think GM is NOT a compelling investment for the really long term, but right now they are too cheap to ignore.In 2013 GM produced an automotive FCF of $3.4 bln. That's pretty nice considering their market cap is about $50 bln as I'm writing this. They achieve this by improved efficiency and award winning products. The average car in the US is still very old so demand is likely to be good in the coming years. Meanwhile Europe is improving and might break even in the quarters of late 2014/early 2015. So there is still potential to grow that cashflow.When we look at the balance sheet it gets really interesting. There is almost $30 bln. of cash. That's more than $17 per share! On the liability side it looks like there is a lot of debt, but most of it is GM Financial and has corresponding assets on the other side. There is a big pension liability which is massively improving because of rising rates(->higher discount rate -> smaller liability) and the only longterm automotive debt is $6.5 bln.Additionally a lot of people miss the net deferred tax assets. They represent taxes GM will NOT have to pay in the future so over time they will be converted into cash. Their book value is more than $10 per share!If you discount the deferred tax assets to $8 (because the Cashflows of it will come in over time) and add it all up you high quality net assets of $22 per share. So basically you are paying $14 for a share that will earn more than $3 in 2014 and potentially a lot more in 2015/16.
Union contract due in September 2014 will be a hit
Like Ford, GM is poised to beat the market handily over the next few years. The new, leaner, greener GM is no longer bowing to the now-impotent UAW. Costs will continue to come down and their lineup is strong. While Ford's F-series pickups are the best selling, and will remain so for the foreseeable future, GM will continue to be strong in the light truck segment which is crucial for healthy margins.GM's valuation is enticing too, with a P/E half that of the overall market and a PEG well under 1 (.71 on 5 year expected growth).
Recovery in Europe and growth in China will drive them higher
Last year they faced tough competition from Ford in the Pickup market. GM introduced their new 2014 half ton trucks in early-mid 2013 while Ford was still building their 2013 trucks and offering big incentives to move them. Ford will soon introduce their 2014 models and will likely lower incentives. related article:firstname.lastname@example.org&YM_MID=1442043&sfvc4enews=42&cl=article_1">http://wardsauto.com/auto-makers/gm-outlook-bullish-heading-new-year?NL=WAW-01&Issue=WAW-01_20140103_WAW-01_759&YM_RIDemail@example.com&YM_MID=1442043&sfvc4enews=42&cl=article_1
New CEO with a strong focus on product development. More room for improvement than competitors such as Ford.
I think that the stock will go up in the short term but will start to falter when they start designing by committee, go back to the old ways of managing.
Govt will not keep bailing the company out.
I like the new cars
Corvette is Automobile Magazines car of the year and Motor Trend has picked the Cadillac CTS. GM is producing great products. The government bailout was the best thing imaginable to free them of the incompetent management of the past.
gov. dumping their share should place downward pressure on this stock
They are - finally - building high-quality vehicles.THey have a very large amount of cash.Despite some truly horrible cars in the past, they still have a large and loyal customer base.
Harvesting a score of almost 14 points, while improving my cost basis by close to 20%.
57 in 2015
According to the news, on Autoline Daily, the company is slipping back into old habits. If they were slipping back into older habits, Sloan era, I would have a better outlook for the company.
We are on the verge of the biggest transformation of automobiles. GM has been changing for the middle class since the 60's and will do so in the future. Teslas is for the rich but the real growth is to get the middle class to bite.
2015 release of the suburban & tahoe will be a success due to pent-up demand
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