2-Star Stocks Poised to Plunge: General Motors?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, auto giant General Motors (NYSE: GM  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at GM and see what CAPS investors are saying about the stock right now.

GM facts

Headquarters (founded) Detroit (1908)
Market Cap $37.1 billion
Industry Automobile manufacturers
Trailing-12-Month Revenue $150.1 million
Management Chairman/CEO Daniel Akerson
CFO Daniel Ammann
Trailing-12-Month Return on Equity 14.6%
Cash/Debt $32.6 billion / $14.8 billion
Competitors Chrysler Group
Ford Motor
Toyota Motor

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 21% of the 1,035 members who have rated GM believe the stock will underperform the S&P 500 going forward.

About a month ago, one of those Fools, bignort2001, succinctly summed up the GM bear case for our community:

A crappy company doesn't become a good one just because the [government] owns it. The auto industry is in for decline everywhere. [A]s one of the worst players, GM will continue to look at shrinking share of a flat or smaller auto market.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of GM and Ford, as well as creating a synthetic long position in Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

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  • Report this Comment On October 03, 2012, at 11:14 AM, z06forum wrote:

    Motley fool once gain missing the Big picture on GM.

    With now the oldest cars on the road in years there will be a need to upgrade to new and more efficient automobiles with the latest gadgetry.

    The next 5 years we will see a surge in new car sales starting in 2013. GM is poised to be at the forefront on delivery of its share of these new hot rides. Sounds like you missed the Bottom and are creating negative settiment in a lame attempt to drive the share price back to your desired entry level. That technique was used a lot in the 90's..

  • Report this Comment On October 03, 2012, at 11:32 AM, Sotograndeman wrote:

    TMF negativity on GM has been eclipsed by some very canny value investors who are able to see the bigger picture and the upside - people of the caliber of Todd Combs at Berkshire who bought back last year, and, just yesterday, David Einhorn.

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