Is General Motors Poised to Plunge?

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 General Motors and see what CAPS investors are saying about the stock right now.

General Motors facts

Headquarters (Founded)

Detroit (1908)

Market Cap

$37.4 billion

Industry

Automobile manufacturers

Trailing-12-Month Revenue

$150.9 billion

Management

Chairman/CEO Daniel Akerson
CFO Daniel Ammann

Return on Equity (Average, Past 3 Years)

15.5%

Cash/Debt

$31.9 billion / $16.7 billion

Competitors

Ford Motor (NYSE: F  )
Honda Motor
(NYSE: HMC  )
Toyota Motor
(NYSE: TM  )

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

On CAPS, 22% of the 1,040 members who have rated General Motors believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, afarrell81, succinctly summed up the bear case for our community:

GM consistently lags its competitors in innovation and design. Public perception in the U.S. also took a hit with the bailout and could lead "buy-American" consumers to choose Ford over GM when purchasing automobiles in the future. Last and most importantly, GM cannot be cost competitive when you consider their higher labor costs and future obligations to their retirees. This will ultimately prevent them from being able to invest in R&D to the extent necessary to become an industry leader in innovation.

Of course, that short pitch come close to telling the entire story for GM. You're in luck, though. The Fool's brand new premium report on GM tells all sides of the story for one of the most compelling industrial companies in the world. You can grab your copy, which comes with free updates for 12 months, by just clicking here.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.


Read/Post Comments (2) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 19, 2012, at 6:09 PM, MARKETSURFER wrote:

    The auto company which should be shorted is

    Toyota Motors. Down the line of vital statistics

    GM is superior to Toyota. Toyota is operating under a crushing debt load of $150 billion which is a debt to equity ratio over 100%. In the latest year Toyota's operating cash flow was $27.99 billion which was not even sufficient to service their debt and interest payments as evidenced by their levered free cash flow of negative $2.81 billion. Toyota is increasing sales in some markets but their margin is low, they are being clobbered now in China due to the territorial dispute, their recalls are in the many millions

    of vehicles and serious competition facing their signature models are accelerating. It's not how many you sell, it's the profit you produce from what you sell.

  • Report this Comment On November 19, 2012, at 8:28 PM, thomassal wrote:

    Why does no one ever seem to mention the elephant in GM's room? Compare GM and Ford income statements. Notice the line called: Income Tax Liability?? GM still has tax-loss carry forwards which Obama graciously gave it (unlike other bankruptcies).

Add your comment.

DocumentId: 2120266, ~/Articles/ArticleHandler.aspx, 8/1/2014 3:53:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement