[steinravnik]

GM Has Bottomed, Will Rebound Soon

May 21 (Bloomberg) -- General Motors Corp., near its low- point for the eight-year tenure of Chief Executive Officer Rick Wagoner, has bottomed out, according to bets on the stock by Dodge & Cox, Capital Research Global Investors and the French insurer Axa SA.

They are among big investors buying large stakes or boosting holdings in the world's biggest automaker this year, even as analysts say Wagoner's rescue plan is stalling amid a weakening economy and record oil prices.

Dodge & Cox, a San Francisco-based mutual-fund manager, bought 8.7 percent of GM shares in the first quarter, according to data compiled by Bloomberg. Capital Research purchased 6.63 million shares to boost its holdings to 5.7 percent. Axa added 4 million shares, increasing its stake to 5.5 percent. The investments were disclosed in regulatory filings for the period that ended March 31, two weeks after GM reached a 25-year low. The shares have since rebounded 4.2 percent, 2.6 percentage points less than the Standard & Poor's 500 Index.

``This company is in infinitely better shape than it was a year ago, with a new labor agreement and other savings,'' said Dan Poole, vice president of equity research at Cleveland-based National City Corp., which bought 106,096 shares last quarter. ``Value investing means when pessimism is greatest, you think about what could go right.''

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awhGjoTPB30w

 

[Ambalanche]

This sounds good but I'm actually suprised because the contract's effects really won't go into effect for anther couple of years. I'd like to know more about what they are baseing the opinon on.

 

[VCDJ]

Bottom i do not think so. GM Has only 3 good cars to sell and only one of the is volume car (malibu). CTS and g8 are not high volume cars. Trucks and Suvs are history and so are seven passanger cross overs. Look at the sales last month. THey were down from last year. To me gm is closer to banckroptcy then ever before. Camry is about to out sell silverado. That tells you everything where consumers are moving to. GM still has nothing to go against prius. Nothing to go agains civic or fit or yaris. Cobalt and aveo have no chance against them. GM has very good truck and suvs thatn people do not want. O yea and rick made 50k hybrid suv that gets 20 mpg. Well even 20mpg at $4 per gallon is nothign. ANd when you factor in 50k it really is stupid. Instead of making cobalt hybrid and two mode malibu, idiot rick made another mistake. Rick will put this company out of business very soon.

 

[prototype66]

Bottom i do not think so. GM Has only 3 good cars to sell and only one of the is volume car (malibu). CTS and g8 are not high volume cars. Trucks and Suvs are history and so are seven passanger cross overs. Look at the sales last month. THey were down from last year. To me gm is closer to banckroptcy then ever before. Camry is about to out sell silverado. That tells you everything where consumers are moving to. GM still has nothing to go against prius. Nothing to go agains civic or fit or yaris. Cobalt and aveo have no chance against them. GM has very good truck and suvs thatn people do not want. O yea and rick made 50k hybrid suv that gets 20 mpg. Well even 20mpg at $4 per gallon is nothign. ANd when you factor in 50k it really is stupid. Instead of making cobalt hybrid and two mode malibu, idiot rick made another mistake. Rick will put this company out of business very soon.

I strongly disagree that GM isgoing out of business.That just will not happen
but thank you for your sunny optimism! Now go back to your bomb shelter .

 

[lio45]

So, Dodge now owns 8.7% of GM. Interesting.

 

[VCDJ]

I strongly disagree that GM isgoing out of business.That just will not happen
but thank you for your sunny optimism! Now go back to your bomb shelter .

You tell me what is going to happen. Rick sold everything that was there to sell. Truck and suvs sales are well you know. It will not get better. GM has 3 good cars to sell. Malibu, CTS, G8. Seven passanger suvs are going the way trucks are going too. GM has to offer 3k incentive on cobalt, honda, toyota, nissan can not keep small cars in stock. Look how much money gm took out in loans? It has so many brands that it can not support. Tell me what is going to happen? will they some how make profit? GM market capital is below 11Billion. What do you think can happen? What if price of gas go up to $5 a gallon and it could happen, what will happen to gm?

 

[ericmvest]

Three mutual funds have bought at total of 20.8% of General Motors stock. That is a lot of money and I am sure the have many very smart analysts reviewing this investment strategy to make sure it pays off.

 

[lio45]

Three mutual funds have bought at total of 20.8% of General Motors stock. That is a lot of money and I am sure the have many very smart analysts reviewing this investment strategy to make sure it pays off.

Mutual funds also sank a lot of money in dot com businesses and real estate investments...

Your logic (that just because someone puts a ****load of money into something, it has to be a good investment, otherwise they would not have done it) is completely flawed.

 

[steinravnik]

Mutual funds also sank a lot of money in dot com businesses and real estate investments...

Your logic (that just because someone puts a ****load of money into something, it has to be a good investment, otherwise they would not have done it) is completely flawed.

Yeah, they did really good with those subprime backed securities.

 

[ericmvest]

Mutual funds also sank a lot of money in dot com businesses and real estate investments...

Your logic (that just because someone puts a ****load of money into something, it has to be a good investment, otherwise they would not have done it) is completely flawed.

You are misrepresenting what I said. I said that if these mutual funds are investing this much money in General Motors, they have many smart analysts analyzing General Motors as an investment. The speculative investors who got burnt on technology and real estate bought close to the peak before the technology and real estate bubbles burst. General Motors is a longer term, value investment. Time will tell if this investment pays off.

 

[BigThreeForever]

GM has to be, without exception, the most undervalued carmaker in the world.

It is very heartening to hear that investment fund managers are finally starting to take note of the restructuring process - admittedly a work in progress -and the ongoing cost reductions, and, of course the approaching new-product offensive.

Rick Waggoner got off to a slow and unpromising start, but teamed with arch product guru Bob Lutz - and feeling unprecedented heat from competitors and investors - has turned into a capable chairman. Lay off him. He has had much incomptence by previous incumbents to repair.

Yes, the oil price scam has undoubtedly damaged GM's short-to-medium term profitability, but GM is now shifting its product balance into the long and admittedly scandalously neglected car portfolio.

It has been almost universally as Gospel truth that oil prices will stay at record highs. There is no reason that they should. Oil prices have more than tripled in the past three years. Demand hasn't. Supply hasn't been crippled. It is a scam, one of titanic proportions and one which is making the super-rich who manipulate prices obscenely richer still, but I digress. There may be a correction in oil prices back to a more realistic level, and I hope that there is. We will see.

There is much to look forward to from GM, especially the product blitz of the next two years. There is the Volt, for one, which hopefully will be areal game-changer. There are some fascinating cars and crossovers. Moreover, GM is rapidly becoming a real design leader and - finally - really is "sweating the details" to recall a 1980s slogan.

If I had any money, I would without doubt buy as much GM stock as I could.

 

[prototype66]

You tell me what is going to happen. Rick sold everything that was there to sell. Truck and suvs sales are well you know. It will not get better. GM has 3 good cars to sell. Malibu, CTS, G8. Seven passanger suvs are going the way trucks are going too. GM has to offer 3k incentive on cobalt, honda, toyota, nissan can not keep small cars in stock. Look how much money gm took out in loans? It has so many brands that it can not support. Tell me what is going to happen? will they some how make profit? GM market capital is below 11Billion. What do you think can happen? What if price of gas go up to $5 a gallon and it could happen, what will happen to gm?

You keep a positive attitude, continue with the turnaround,proceed with the new product development, continue to modify the business plan without putting too many people out of jobs and improve quality in engineering,design and production. Oh wait, that is what they are doing!
You might want to give GM a little more time, Rick and Bob have to undo 30 + years of F#*&%ups! That does take time ya know.
After gaining 40 lbs in 25 years of being out of highschool, how fas can you take the weight off, be realistic. 6-8 yrears to correct 30 years of corrupt management and crap products (for the most part) and customer dissatisfaction is unrealistic!

 

[prototype66]

And they have more than 3 good vehicles ya goof!
Besides, it was just my opinion dude, don't take it so personally. I wasn't slamming you , just disagreeing!

By the way, cobalt only has $500 on the hood.as of today the extra $750 ended yesterday for owner loyalty.

 

[hotrod1949]

You are misrepresenting what I said. I said that if these mutual funds are investing this much money in General Motors, they have many smart analysts analyzing General Motors as an investment. The speculative investors who got burnt on technology and real estate bought close to the peak before the technology and real estate bubbles burst. General Motors is a longer term, value investment. Time will tell if this investment pays off.

It will be interesting, fund managers are interested in making money now, so they can show excellent results, so they can sell more units. They are generally not in it for the long term. It could possibly take influence away from the product guys, as they force financial results.

 

[CadiEldo67]

Seriously, look at how quickly and how much Cadillac has been changing its perception. The CTS is world class. You couldn't ever say that about the Catera. Chevy now has the Malibu, which is running toe to toe with the Accord and Camry, usually beating the latter. Saturn has a completely new lineup, and is competing well with the benchmarks of its respective classes. Pontiac, has the G8, and you gotta start somewhere. Buick has the excellent Enclave, and GMC has a completely new lineup, with the exception of the Canyon, and Savana(if that counts)

All and all, I don't think for a minute that GM is doing badly when it comes to building cars. They really need to improve bits and pieces, and work hard to change the negative perception about each brand.

 

[jbernie]

Bottom i do not think so. GM Has only 3 good cars to sell and only one of the is volume car (malibu). CTS and g8 are not high volume cars. Trucks and Suvs are history and so are seven passanger cross overs. Look at the sales last month. THey were down from last year. To me gm is closer to banckroptcy then ever before. Camry is about to out sell silverado. That tells you everything where consumers are moving to. GM still has nothing to go against prius. Nothing to go agains civic or fit or yaris. Cobalt and aveo have no chance against them. GM has very good truck and suvs thatn people do not want. O yea and rick made 50k hybrid suv that gets 20 mpg. Well even 20mpg at $4 per gallon is nothign. ANd when you factor in 50k it really is stupid. Instead of making cobalt hybrid and two mode malibu, idiot rick made another mistake. Rick will put this company out of business very soon.

Given these are the only types of posts you seem to post I wonder why you bother to waste your time/energy posting.

 

[andy82471]

Given these are the only types of posts you seem to post I wonder why you bother to waste your time/energy posting.

Just because you dont like what he says doesn't make his post irrelavant. For the most part he is correct. The Aveo, and Cobalt is not in the same league as Fit, Civic, Yaris, or Corolla. The resale value proves that. The Malibu is a great car that I think can compete credibly with the Accord and Camry. But I think the future of the automotive world is heading toward the subcompact and compact direction now that price of gas is approaching 4 bucks a gallon. Whoever, owns the subcompact and compact car market is going to rule the automotive world. And right now GM doesn't have a class leading compact or subcompact. The heydays of PUs and SUVs are over.

 

[FenwickHockey65]

Bottom i do not think so. GM Has only 3 good cars to sell and only one of the is volume car (malibu). CTS and g8 are not high volume cars. Trucks and Suvs are history and so are seven passanger cross overs. Look at the sales last month. THey were down from last year. To me gm is closer to banckroptcy then ever before. Camry is about to out sell silverado. That tells you everything where consumers are moving to. GM still has nothing to go against prius. Nothing to go agains civic or fit or yaris. Cobalt and aveo have no chance against them. GM has very good truck and suvs thatn people do not want. O yea and rick made 50k hybrid suv that gets 20 mpg. Well even 20mpg at $4 per gallon is nothign. ANd when you factor in 50k it really is stupid. Instead of making cobalt hybrid and two mode malibu, idiot rick made another mistake. Rick will put this company out of business very soon.

If only I had any idea as to what you just said...

 

[JeffInDFW]

When Chrysler stock was in the toilet in the early 90s, I knew the "new" LH cars were on the way. I didn't buy. LH cars came out, they were a hit, Chrysler stock SOARED several hundred percent, I beat myself in the head.

I've been watching GM stock, waiting for the bottom....I see the Malibu is out and it seems to be the real deal and capable of selling huge numbers. The CTS is a good halo car for ALL of GM. The Volt and its technology can spread across all of GM's lineup and put GM a full generation of vehicles ahead of the entire industry. I wonder if I'll have the vision to jump in on GM stock at the right time THIS TIME, or will I blow it like I did with Chrysler in the early 90s???

 

[mgescuro]

I am skeptical about Dodge & Cox's analysis of this.
While I do agree GM is near the bottom, this is a very weak economy. And GM is highly susceptible to the cyclical nature of the market.
I would expect flat performance throughout the year from GM, with a possibly upswing Q1 2009 -- after the elections.

On another note... I didn't know Dodge & Cox was San Francisco based??? :blink: