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JOSH BROWN CNBC CONTRIBUTOR SAYS ABOUT GM “RIDICULOUSLY UNDERVALUED”

1. GM multiple catalysts working for it!

2. General Motors (NYSE:GM) (TSE:GMM.U) last issued its quarterly earnings results on Wednesday, May 5th. The auto manufacturer reported $2.25 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.97 by $1.28

3. The company is expected to report EPS of $1.01, up 302% from the prior-year quarter.

4. Positive estimate revisions reflect analyst optimism about the company’s business and profitability and most analysts upgraded GM’s targets.

5. Brightdrop: aimed at fleet and delivery companies. Delivery vans for FEDEX.

6. [Tesla](https://www.cnbc.com/quotes/TSLA) trades at a lofty valuation β€” 137 times forward price-to-earnings.

7. Cars sold by GM = 6.8 million in 2020

8. Cars sold by TESLA = 500,000 in 2020

9. GM’s Cruise

10. Last year’s growth was due to Cruise receiving a valuation of over $30 Billion and Gm owns over 65% of CRUISE.

11. Why not Ford: GM has consistently been more profitable than F averaging 12% Gross Profit Margin and 5.3% Income Margin over the last 9 years.

What do you think?

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11 Comments

  1. Let’s review GM as a company:

    1. They made the first practical EV called EV1 in 1996. GM destroyed all EV1 in 2000s because they didnt want EV to cannibalize their ICE vehicle sale. (Who killed Electric cars?)
    2. GM’s business model is to sell cars $2k – 3k cheaper than Toyota but costing owners 10x more repairs. GM’s parts and cheap and widely available, because it is their business model!
    3. GM and other legacy automakers did minimal green energy vehicles until Tesla came. They would make EVs at a loss with no marketing just to fulfill their government quota.

    Note: legacy automakers LOVE hybrid because it is so complex and has twice as many parts (EV + ICE powertrain) they can make money servicing exclusively at their dealership.

    4. US regulators love to put foreign competitor like Toyota under microscope whenever some defects come out like sudden acceleration. But they don’t make a big fuss about defects with GM – a lot of GM cars made in mid 2000s had power steering motor issue and sudden engine stall issue that caused several deaths, but US regulators never forced GM to recall.

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