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.''