General Motors Corporation (GM)

(Top Pick Feb 21/13, Up 35.90%) The whole space has been driven by North American markets. Lot of positive momentum going on. New management team is laser focused. They are making cars that people want to buy right now. She has been trimming as the stock has come up but there is good momentum and the valuation is reasonable.

He is positive on the automotive sector. He thinks Eu has bottomed in automotive. He doesn’t like that GM have bad relations with their pensioners. Prefers others. He owns F-N. Better from labour relations and growth prospects point of view. Also, likes TRW, which is his favourite in this sector.

Benefits from the bankruptcy. Breakeven level is much lower than it used to be. They are now very, very profitable. They carried over tax shields from before bankruptcy.

Auto sector has been in the news a lot with better sales and constantly coming out with good news. Chart shows a fantastic looking uptrend. Old resistance was broken.

US government wants to sell $30 million of their shares and a US pension fund wants to sell $20 million of their shares. His rule is that when a government is selling their shares, it is usually a good time to buy. This is a very good company and their stock is cheap. This company is close to the US consumer and he feels their stock works for a very long time to come.

(Top Pick Feb 20’13, Up 27.05%)

(Top Pick Feb 21/13, Up 7.45%)

[Time did not permit a comment on this top pick during the show but said this today about Ford (F-N): There is some pretty good momentum with auto makers]. Prefers GM, though.

US government is going to exit their position that they got during the TARP program in 2008. Doesn’t feel this company is the most inventive or innovative of the major carmakers. Feels Ford (F-N) is doing a better job right now. Toyota (TM-N) has regained a lot of the lustre that it lost during the accelerator recall.

With the upcoming US elections and Obama touting this company, would this be a good time to buy this stock? It would not be a reason he would use to buy the stock. Auto sales are picking up a little. Inevitably the age of cars is getting older. Not a growth business to him. Probably okay but he doesn’t follow it that closely.

This is a good place in the car cycle and you are definitely seeing consumers buying more cars. Also, their confidence is being buoyed. This company is struggling in Europe which will continue for a while. Feels you buy these things in a recession when car sales are slumping.

Have done quite well on their North American operations and will be having a new truck line coming up in a couple of years but Europe is the big problem for all North American OEMs. No one is making money over there and it is very difficult to restructure. Also, Japanese manufacturers are coming back into the market and taking share that they lost last year.