Opinions The Weekly Buzzing Stocks by Billy Kawasaki
General Motors CorporationGMTOP PICKDec 07, 2023
Stock price when the opinion was issued
As of Jun 23, 2026. Market Open.
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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.
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.
Gordon ReidWas 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.
John ZechnerUps 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.
Gordon Reid
Wells Fargo projects that a strike would cost GM $2.7 billion and Ford $2.4 billion of adjusted EBIT a month. That said, he's not that worried and is not a risk to sell the carmakers. A strike is a one-off event, and the stock market cares only about the future. Also, Biden won't let a strike drag on; cars are a critical industry. Third, these stocks have already come down to absorb a stock. That said, if the strike leads to much higher wages, that would hurt these stocks. Don't rush in to buy these stocks.
There is a transition to EV's going on and GM is starting to get into this. However it is hard to be nimble when it is such a large company. The internal combustion engine market will continue with most cars still belonging to this category. He is not buying at these levels but is watching.
At general motors, we are passionate about designing, building and selling the world’s best vehicles. this vision unites us as a team each and every day and is the hallmark of our customer-driven culture. we set high standards for our company so that we can give you the best cars, trucks and suvs. it’s our commitment to deliver vehicles with compelling designs, flawless quality and reliability, and leading safety, fuel economy and infotainment features. the very things that create that special bond between driver and vehicle. whether it’s a chevrolet, buick, gmc, cadillac or holden, making the world’s best vehicles can only happen with the world’s greatest employees. we take great pride in our work, and take great care to deliver exceptional cars and a positive ownership experience to our customers in 140 countries around the world. for information on the gm privacy statement, please visit http://www.gm.com/privacy-statement.html Social media mentions are up 1300% in the past 24h.