General Motors Corporation (GM)

At a 1-year high, he's pleased with performance. Hold on and wait. CEO has been able to pivot toward EVs and then back to ICE as consumers pushed back. Astute to make money in either environment. Inexpensive multiple.

It reports Tuesday. It's the second-cheapest S&P stock that isn't a bank. Are buying back a monster amount of shares. Stay long.

Margins are superior to Ford's. Likes the CEO and plan going forward. Incredibly inexpensive valuation.

Higher margins than Ford, growing topline just as well. Likes its electrification program a bit more. Recent earnings were very good.

It reports Tuesday. Bad news like falling sales are all baked into the stock, btu GM is very tied to interest rates and could get hit hard with Friday's wage report if there is big jump in wages.

Doing some things well. Probably good that its EVs are going to use TSLA bollards. Wonderful brands. Will benefit from onshoring of America. But once you've opted to adopt your competitor's technology, writing might be on the wall.

There was a trading opportunity in November but now you should wait before buying. It has announced a $10 billion share buyback which amounts to about a quarter of its shares. It's interesting to note that over the past 30 years the number of autos sold in the U.S. has remained steady at about 15 million per year so basically the overall market is stagnant.

The charts show it is coming off the bottom but is still in a long term downward trend. He is not sure if the recent uptrend is meaningful yet.

They're investing a lot into EVs, but EVs are starting to atrophy.

Not asset light. High liabilities. Low margins. Better options for investors out there. High debt levels. Not a great business. Not founder led or owned. 

Autos are mired in the UAW strike now. Past strikes tend to be a good time to buy shares, though. He prefers GM over Ford for its higher margins, and its EV program competes well against Ford, though Tesla is the winner in EVs (surprises him). Ford and GM are trading at a reasonable multiple, but Tesla's is much higher, which gives him pause.

(A Top Pick Oct 06/22, Down 12%)

The UAW strike is impacted all carmakers. Take a 3-10-year outlook and see the effect of EVs, a mammoth transformation in the car industry. Some say GM is a value trap, and that's possible. But he sees the upside being large. The downside is that it trades under 5x enterprise value to EBITDA.

Was trading at 8x and their beat earnings, but shares still went down. The market feels that GM won't transition to EVs without big sacrifices. But GM has a lot of cash flow and is a dominant brand name. They will transition to EVs. Now, there's a car glut, even in EVs. Still owns it, but has disappointed.

Ups and downs. Meeting most of its objectives on production, but a lot of the meaningful objectives are a ways out. Very modest 4.5x expected earnings. Downside on valuation is quite limited. Upside is we move back to previous volumes, though probably not tomorrow. Margins are higher than Ford.