+ Watch GM
on My Watchlist
The Company is engaged in the worldwide development, production, and marketing of cars, trucks, and parts.
General motors continues to lag behind its competitors improvements. Its vehicles are stale and bland.
It will take GM a few years at least to get out from the shadow of this recall scandal. I anticipate it will be kind of like BAC in the 08 mortgage crisis. Even when the numbers start to look good, it will take several more quarters to convince people to jump on board again.
Loading up here... GM is sitting on cash, their obligations due to bankruptcy are nill, and they are consistently winning in performance and reliability categories for their new vehicles. China is the future market and GM is there.
will be constrained for a little bit until the news dies down
Value play. Stock pressured due to recent recall issue.
Predicting a bounce to above $40 within the next few months. The macro picture in the US remains strong, a growing 3.5% dividend is very attractive to income investors and provides a floor for the stock. GM has lost more in value than a worse case lawsuit from the DOJ and loss in sales would actually generate, pointing towards GM being a value play and an income play. Bullish until GM hits at least $40.
Sub-prime lending run amok.
Sell-off looks to be excessive.
GM new products now are competing with the best vehicles in each class. They have been able to cut costs but charge more for their products.
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.
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