GM

General Motors Company

Industrial/Transportation


Presented:10/08/2013
Price:$35.18
Cap:$48.70B
Current Price:$47.85
Cap:$53.78B

Presented

Date10/08/2013
Price$35.18
Market Cap$48.70B
Ent Value$62.27B
P/E Ratio22.82x
Book Value$22.16
Div Yield3.2%
Shares O/S1,384.20M
Ave Daily Vol13,890,000
Short Int5.73%

Current

Price$47.85
Market Cap$53.78B
General Motors Company (GM) designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. The company markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Opel, Holden, and Vauxhall brand names, as well as under the Alpheon, Jiefang, Baojun, and Wuling brand names. It also sells cars and trucks to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, the company offers connected safety, security and mobility solutions, and information technology services. The company, through its subsidiary, General Motors Financial Company, Inc. provides automotive financing services and lease products through GM dealerships in connection with the sale of used and new automobiles that target customers with sub-prime and prime credit bureau scores. The company was founded in 1908 and is based in Detroit, Michigan.

Highlights

The story behind General Motors (GM) is well-understood and GM is trading at just 7.5x earnings. The product cycle is at its peak in North America, but the pickup truck cycle has been performing as well as optimists had hoped (the old fleet of pickups has been driving sales). The presenter is long shares of GM, and believes the market under-appreciates both GM’s earnings power, and the potential for capital to be deployed in the form of share buybacks. Given the company’s liquidity needs, the presenter believes GM can generate $4 billion of FCF this year, and potentially as much as $7 billion next year. The company will have over $20 billion of excess capital that could be returned to investors over the next 3--12 months.

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Idea Discussion

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