- GM is cheap, trading at 7x forward with a 3.6% yield.
- I'm reversing my previous Sell opinion and plan to put my money where my mouth is.
- GM metrics beat F across the board.
General Motors Is Still Skidding Because Of Uncertainty Surrounding The Company
- Uncertainty due to recall costs and potential sub-prime lending fines are clouding the stock right now.
- There is a patch of blue skies on the horizon, as monthly car sales continue to increase for the company.
- I believe the stock is undervalued for one reason, and one reason only, uncertainty.
- Leadership is instrumental, and these three turnaround stocks have female CEOs leading the way.
- A couple of the companies still look to be trading in deep value territory.
- But one CEO has had a tough time so far.
Was This A Kitchen Sink Quarter For General Motors?
- The company took a $1.2 billion charge in the never ending recall debacle.
- On the bright side the company saw revenue increase by 1% from last year.
- The company is reducing operations in Russia by 20% due to the turmoil taking place in the region.
- Even with the recall, GM continues to perform very well with sales strong, and shares are very cheap.
- GM is seeing sales growth in America, significant growth in China, and is moving closer to breakeven in Europe thanks to capacity cuts.
- Weak margins are likely transitory as automakers like Ford cut prices ahead of major product launches.
- With $4 in 2015 earnings power, a strong balance sheet, positive free cash flow, and a great dividend, GM is extremely cheap and should trade past $48.
Ford Revs Higher As GM Falters: How To Think About Their Investment Prospects
- The most important determinant to financial outperformance in the auto space is not based on which type of car or truck you drive (or like).
- It is based on understanding and capitalizing on the factors that drive stock prices.
- Stock prices are driven, of course, by the buying and selling of shares, and the buying and selling of shares is primarily influenced by a company’s cash-flow-derived intrinsic value.
- Let's take a look at Ford's and GM's recent quarterly earnings and offer our perspective on their respective investment opportunities.
Update: General Motors Earnings - Meets On EPS And Takes Huge Reserves; Value Trap
- General Motors met reduced expectations and earned $0.58/share.
- Huge Reserves Expected; Impact of Recalls on Sales Still to Come.
- Change position to Sell from Negative Bias.
High-Yielding General Motors May Present A Better Price Soon
- The stock is inexpensively valued based on 2015 earnings estimates and has excellent near- and long-term earnings growth expectations.
- The dividend yield is 3.23% right now, but I believe it can get higher because I think the stock price may come down a bit.
- Massive amount of vehicles recalls don't seem to be stopping consumers from buying GM vehicles as sales continue to increase here at home, and abroad.
General Motors: Effects Of The Recalls Will Become Apparent
- General Motors is on a recall spree and has recalled more cars year to date than the entire US industry did in 2013.
- The auto manufacturer has most recently recalled 27,000 Spark cars in South Korea due to defective transmission mount.
- Total Chevrolet brand sales were up 1% for the first half of the year but fell 2.5% for June 2014 compared to June 2013.
- General Motors has halted its production in South Africa after a strike by more than 220,000 metal workers which disrupted the production process.
- General Motors is going to close its Opel Bochum factory in Germany in pursuit of curbing its high operating costs in Europe.
- General Motors has shaky revenue and a federal investigation to deal with.
- General Motors has a healthy balance sheet and increasing cash from operations.
- General Motors is trading at a very high price to earnings ratio and may not be good to enter at this time.
- Despite recall issues, GM posted higher sales number for the month of June.
- This could be due to higher numbers of customers returning to GM stores for recall purposes, recovering auto sales post-recession, or other factors.
- GM has been making plans for expansion in China, in tandem with possible recovery in the domestic market.
- While YTD GM stock is at a relative low point, recovery is possible; investors might consider taking positions in the second half of 2014 if results continue up.
- General Motors' fundamentals remain strong, despite record recalls.
- The company has probably already seen the worst it could get on the recall front.
- The "Made in China" era is over. What is good for China is not good for General Motors.
- The unprecedented recalls by GM are costing billions, its compensation policy could exacerbate this.
- GM has enacted a "whatever it takes" policy to try and get out from under the ignition switch issue.
- Shares are still holding up fairly well and could still be a great long-term investment.
- GM shares were briefly halted from trading as the automaker announced it would be recalling another 7.6 million vehicles.
- The latest estimates have GM incurring a cost of $1.2 billion to fix vehicles recalled in its second fiscal quarter of 2014 alone.
- However, GM's June sales figure was released earlier and it shows that GM auto sales rose 1% last month, despite analysts forecasting a 6.3% downturn.
GM's Compensation Fund Likely To Be A Drop In The Bucket
- Details of GM's compensation fund became clearer this morning.
- This is one of the final steps to try and put the recall issue behind the company; even if they continue to recall vehicles.
- The amount is likely to be negligible to GM's bottom line.
Can General Motors' Mary Barra Deliver On Her Plans?
- General Motors is in damage control mode. Mary Barra has fired 15 key employees including the switch engineer and development engineer.
- Sales continue to defy the negative headlines, but how long can this trend continue?.
- Despite some positive results around the process and cultural change, a stronger brand focus is needed to drive better results.
- During this recall mess, GM has done well to continue to sell vehicles at a good clip.
- The company's latest request to have dealers stop selling the Cruze has no choice but to hit the bottom line, however.
- In addition, the company announced this morning that coming criminal charges/settlement could be on the radar.
- I'm a long-term bull on the company, but if you're holding profits from the low $30s, QTR thinks selling here could be the right move.
4 Reasons Why Investors Should Buy General Motors On The Drop
- General Motors is trying to improve its image, and has stepped up its quality control to improve customer safety.
- General Motors' sales look decent despite the recent controversies, and the company's vehicles are being recognized for their quality.
- General Motors is making solid moves in the emerging markets, where it can provide tough competition to Ford.
- General Motors' valuation is quite attractive and better than Ford, making the stock a good buy on the drop.
General Motors' 2014 Nightmare Continues; Investors Shouldn't Wait For Company To Wake Up
- GM announced the recall of another 3.4 million vehicles for ignition switch problems.
- Nightmare continues for GM, mired in negative press, and costly recalls.
- While GM has made some positive moves abroad, until it can clean up its act internally, the stock price will not likely recover.
at MarketWatch.com (Wed, 12:16PM)
at MarketWatch.com (Wed, 7:08AM)
at CNBC.com (Wed, 7:03AM)
at MarketWatch.com (Tue, 5:45PM)
at CNBC.com (Mon, 4:00PM)
at CNBC.com (Mon, 12:29PM)
at CNBC.com (Mon, 11:15AM)
at CNBC.com (Mon, 10:30AM)
at CNBC.com (Mon, 10:00AM)
at CNBC.com (Mon, 5:00AM)
at MarketWatch.com (Mon, 2:57AM)
at CNBC.com (Fri, 12:16PM)
at MarketWatch.com (Fri, 10:43AM)
at CNBC.com (Fri, 6:21AM)
at CNBC.com (Thu, 4:26PM)
at CNBC.com (Thu, 4:13PM)
at MarketWatch.com (Thu, 12:19PM)
at MarketWatch.com (Thu, 10:00AM)
at MarketWatch.com (Thu, 8:27AM)
at CNBC.com (Aug 13, 2014)
Tue, Aug. 5, 4:34 AM
- U.S. authorities are investigating General Motors' (NYSE:GM) auto financing arm over subprime auto loans it made and securitized since 2007.
- Financial services firms have paid billions of dollars to settle investigations under FIRREA (Financial Institutions Reform, Recovery and Enforcement Act) which probed mortgages pooled into securities in the run-up to the financial crisis, however, this new subpoena suggests that investigators are also looking at the securitization of subprime auto loans.
- GM Financial says it was served the subpoena from the DOJ on July 28.
Mon, Aug. 4, 2:33 PM
- Attorneys with General Motors (GM +0.4%)have filed documents to seek protection from some lawsuits relating to the ignition switch recall issue.
- The automaker, which has set up a $400M claims funds for death and personal-injury claims, is attempting to shield itself from liability in some cases involving economic damages and minor accidents prior to the GM bankruptcy.
- In a filing with the bankruptcy court in Manhattan, the company says "old" GM is liable in many of the cases.
Sun, Aug. 3, 9:48 AM
- GM (NYSE:GM) has asked Dicastal, its main Chinese supplier, to find an alternative source of components after a Zhongrong Metal Products plant exploded on Saturday killing at least 69 people and injuring approximately 200.
- The Zhongrong factory made wheels that were supplied to GM through Dicastal - its tier-1 component supplier.
- General Motors notes that yesterday's accident will not cause any immediate impact on its production because it currently has "sufficient inventory".
Fri, Aug. 1, 11:03 AM
- Automobile prices in the U.S. rose 0.1% M/M and 2.1% Y/Y during July, according to estimates from Kelley Blue Book.
- The increase is due largely to a slight shift in mix toward SUVs and crossovers. General Motors (GM -0.4%), Chrysler (OTCPK:FIATY), and Volkswagen (OTCQX:VLKAY) showed the biggest gains of the major automakers.
- Edmunds sees the overall industry selling rate to be right at 16.8M units for the month.
- Truecar.com has its eyes on the incentives being offered by dealerships. The firm estimates incentive spending was up 8.4% Y/Y in July to mark the biggest jump since 2010 as automakers looked to clear inventory.
- July U.S. sales gains: GM +9.4%, Ford (NYSE:F) +9.5, Toyota (NYSE:TM) +11.6%, Nissan +11.4 (OTCPK:NSANY), Chrysler +19.7%.
Fri, Aug. 1, 9:46 AM
- General Motors (GM +0.1%) improved sales across all segments in July and saw its average price per unit improve as the mix shifted slightly toward larger SUVs and crossovers.
- Sales by brand: Chevrolet +7.7% to 175,155; GMC +22.2 to 48,081; Buick +7.9% to 17,683; Cadillac -2.6% to 15,241.
- GM sold 100,122 crossovers and SUVs in July. Cadillac Escalade sales were up 32%.
- Chevrolet Camaro deliveries were up 25%, while the Volt and Malibu also bested expectations.
- The automaker ended the month with 75 days supply at 798,532 units, compared to 72 days a month ago.
Fri, Aug. 1, 9:36 AM
- General Motors (NYSE:GM) unit sales +9.4% to 256,160 to fall just short of the estimate for a 10.7% gain.
- Retail sales increased 9% in July.
- Fleet sales were up 21%.
- The automaker notes transactions prices were flat compared to last month and up $2K per unit Y/Y. Despite the auto recall news, incentives were only up 20 bps to 11.2% in July - no worse than the industry average.
Fri, Aug. 1, 6:40 AM
- Several hundred claims against GM (NYSE:GM) are expected to be filed this morning, as the automaker begins accepting claims for its faulty ignition switch compensation program.
- General Motors has set aside $400M for payouts, although the total amount of awards is not capped and could increase.
- Lawyers are willing to give the program a chance, since it does not prevent them from suing GM while waiting to see how much of a payout they would be entitled to. Plaintiffs that take a payout, however, must drop their lawsuits.
- GM -0.6% premarket
Wed, Jul. 30, 3:01 AM
- GM (NYSE:GM) is now facing a lawsuit which was filed in a Manhattan federal court by 658 people who state they were injured or relate to a victim killed in an accident due to a faulty ignition switch.
- Since the beginning of the year, GM recalled nearly 15M vehicles worldwide over the defective switches and set up a program to compensate victims of crashes.
- The newly filed lawsuit is aimed at covering claims that are not eligible for payments under the conditions of the program.
Tue, Jul. 29, 7:06 AM
- General Motors (NYSE:GM) continues to struggle this year in Canada with in-fighting between its network of dealerships affecting performance.
- YTD sales for GM Canada fell 2.3% Y/Y during the first six months of the year in an automobile market that was up 2.8% overall.
- The automaker's reputation in Canada with consumers is shakier than it is in the U.S. - a situation that hasn't been improved by GM's massive wave of recalls.
Mon, Jul. 28, 11:33 AM
- General Motors (GM -0.2%) says it will offer wireless smartphone charging in the 2015 Cadillac ATS model through the Powermat charging system.
- The automaker owns a piece of Powermat via a $5M investment by GM Ventures that some analysts think will eventually lead to a huge payday.
- Some tech blogs say Powermat is a step ahead of rivals in the burgeoning wireless charging industry. A positive sign is that adoption in Starbucks stores is in the process of rolling out.
- Procter & Gamble (PG -0.4%) is also a Powermat partner through its Duracell brand.
Mon, Jul. 28, 7:53 AM
Fri, Jul. 25, 8:56 AM
- Downgrading to Outperform from Buy, CLSA says GM's pricing is unpredictable and questions whether the automaker can push new through new truck price gains.
- Also downgrading is Deutsche, which cuts to Hold from Buy.
- Buy the dip, says UBS, calling yesterday's 4.5% decline an overreaction, noting better-than-forecast results in South America and Asia. The team also notes management's confidence for better North American pricing ahead in H2.
- Goldman maintains GM as a Conviction Buy.
- Shares -0.75% premarket
- Earnings coverage
Thu, Jul. 24, 2:45 PM
- General Motors (GM -4.2%) reported in-line Q2 earnings - not including $1.2B related to its never-ending recalls - but its North American margins came in at just 9.3%, which helps explain today's sharp losses in GM shares.
- The Q2 margin result was below general expectations that GM could post 10%-plus underlying (ex-recall) margins this quarter as the company is generating higher sales prices; in its earnings conference call, GM says it remains confident in its 10% margin target.
- Also in the call, CFO Chuck Stevens raised concerns over the Russian economy, saying GM had cut production by 20% in the country amid the political turmoil in the region.
Thu, Jul. 24, 7:43 AM
- After excluding the impact of special items - $1.2B in recall-related costs and $200M in restructuring costs - GM EBIT of $1.4B vs. $2.3B a year ago. Adjusted EPS of $0.58 vs. $0.84. Adjusted automotive free cash flow of $1.9B vs. $2.6B.
- GM North America EBIT-adjusted of $1.4B vs. $2B a year ago.
- GM Europe EBIT-adjusted loss of $300M vs. a $100M loss a year ago.
- GM International Operations EBIT-adjusted of $300M vs. $200M.
- GM South America EBIT-adjusted loss of $100M vs. a $100M gain.
- GM Financial pre-tax earnings of $300M is flat Y/Y.
- Previously: General Motors beats by $0.01, misses on revenue
- Shares -1.5% premarket
Thu, Jul. 24, 7:33 AM
Thu, Jul. 24, 2:51 AM
- General Motors (NYSE:GM) has given federal safety regulators new details regarding 19 fatal crashes involving three older models recalled this year for defective ignition switches.
- The new information which covers fatal crashes that date as far back as 2009 was supplied to the U.S. National Highway Traffic Safety Administration and posted on its Early Warning Reporting database.
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