At the time after this article was written, the stock of this firm is still one that investors should consider purchasing.
In early May, Barron’s suggested that investors purchase General Motors (GM) shares. It was unfortunate that the circumstances arose at such a bad moment. Since the call, GM shares have fallen 14%, which is more than twice the 6% drop in the S&P 500SPX +3.06 percent.
Even though they were well-known at the time, macroeconomic headwinds have worsened. Inflation worries have risen, the Federal Reserve has increased its pace of rate rises, and fewer individuals consider purchasing automobiles when they’re afraid of losing their jobs.
Because of this, fewer people are interested in owning automotive stocks. However, General Motors has taken a hit, although not as much as Ford Motor Company F +3.89% (F). Tesla TSLA +4.52 percent (TSLA), whose stock is down 16 percent, or whose shares are down 17 percent.
This is fantastic news for value investors, who can now expect a recession to be priced into the car sector’s forecasts. Amid the epidemic, GM stock was trading at approximately five times its 2023 profits projection. To abandon ship at this point would be a major mistake.
With that said, GM provides investors the opportunity to take advantage of Wall Street parlance for a “what if” scenario. What if a portion of GM’s ambitions for electric vehicles, driverless automobiles, and software-based services comes to fruition? If such is the case, the stock is a bargain.
GM plans to invest around $35 billion in the development and production of electric vehicles between the years 2021 and 2025. To compete for EV market share, that’s as aggressive as it gets for any conventional automaker in the world. The GM electric vehicle supply chain is also industry-leading thanks to the company’s collaborations with battery manufacturers, chemical businesses, and raw material suppliers.
By 2025, the business expects to have sold a million electric vehicles in North America. General Motors CEO, Mary Barra recently told Barron’s that the company would be “the leader by mid-decade” due to a bigger product line.
It’s been a bumpy ride for electric automobiles, but things are starting to look brighter. After announcing its ultra-luxury Cadillac EV, Celestiq, General Motors introduced the Cadillac Lyriq SUV, which is priced like Tesla’s Model Y, at the Detroit Auto Show. The Chevy Bolt, Silverado, Blazer, and GMC Hummer truck are now part of the Chevy lineup.
For a price this cheap, you can’t go wrong with this superb line-up.