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What: An upgrade from UBS helped give General Motors
So what: "We turned the key, but nothing happened." It's not immediately clear why KAR failed to start this morning, though. Sales at the wholesale used vehicle auctioneer rose 5% last quarter, while profits per share nearly tripled to $0.29 per share. Sure, the company missed on earnings, but it beat revenue estimates handily.
Now what: One out of two, however, is apparently a losing score on Wall Street today. And honestly, I don't blame investors for bailing out of KAR. According to management, the most KAR could earn this year is $0.80 per share, which gives the stock a 23 times forward earnings multiple -- expensive for a projected 13.5% grower like KAR. "Adjusted" income is supposed to be higher, but KAR didn't bother to provide its shareholders a cash flow statement along with its report. If management isn't going to make even that small effort to support its claims, I see no reason why investors should feel obliged to stand by the company until the tow-truck arrives.
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General Motors is a Motley Fool Inside Value recommendation, but Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.