The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and consumer goods editor/analyst Austin Smith discuss topics across the investing world.
In today's edition, Brendan and Austin discuss recent earnings from General Motors; in particular, why the company's stock remains so cheap. One of the main reasons is GM's exposure to Europe, where the company has lost over $15 billion since 1999. Investors have been hoping to hear GM's plans for turning around in Europe, a problem mainly due to an overcapacity problem and the continent's struggling economies. The fact that the U.S. government still owns over 30% of GM's common shares could be another factor helping keep the share price low, not to mention the company's $20 billion-plus pension obligations. Having said that, the stock is dirt cheap at under five times earnings. Is that justified, or does GM rate as a buy?
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Austin Smith has no positions in the stocks mentioned above. Brendan Byrnes owns shares of Ford. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend BorgWarner, Ford, and General Motors Company. 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 Motley Fool has a disclosure policy.