General Motors Company
) hit new 52-week high of $33.77 on May 17, which is above its
previous level of $32.44 as well as the Initial Public Offering
(IPO) price of $33.00 (held in Nov 2010) for the first time since
May 4, 2011.
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GM's last closing price was $33.42, which represented a solid
one-year return of 54.7% and year-to-date return of 14.7%. The
world's second largest automaker (by sales volume) has a market
cap of $45.7 billion. Average volume of shares traded over the
last three months stood at approximately 11,419.4K.
Shares of the company started escalating following its
announcement of revival plan in Europe and U.S. Treasury
department's announcement of selling a significant stake in the
company as well as improvements in the U.S. and Chinese markets.
Last month, Chairman and CEO of GM, Dan Akerson, promised to
invest €4 billion ($5.2 billion) in its European operation Opel
without revealing any plan to close down plants or other specific
measures in order to boost earnings. Opel plans to launch 23 new
models and 13 new engines within 2016 and develop a small car
platform with French partner
PSA Peugeot Citroen
In the same month, the U.S. Treasury Department revealed that it
sold $621 million worth of GM common stock in March, recovering
$30.4 billion of the $49.5 billion bailout fund received by GM.
The U.S. Treasury intends to sell the remaining 16% stake in GM
early 2014. The rising stock price would definitely help the
government recovering its bailout fund as much as possible.
GM reported a 28.0% fall in earnings to 67 cents per share in the
first quarter of the year from 93 cents in the same quarter of
2012 (all excluding special items) due to lower earnings
generated from the company's all geographic operations except
Europe. Despite this, the automaker's earnings exceeded the Zacks
Consensus Estimate by 11 cents per share.
Revenues in the quarter slid 2.4% to $36.9 billion, despite a
3.6% rise in retail unit sales to 2.4 million vehicles globally.
Nevertheless, it was higher than the Zacks Consensus Estimate of
General Motors is gearing up for more than 40 major vehicle
launches in 2013 across the globe in order to drive sales and
revenues. In addition, the company expects its European results
will improve further based on its cost reduction measures.
Last month, GM's sales increased 11.4% to 237,646 vehicles,
driven by strong sales of its all four brands and especially
Chevrolet Silverado pickup truck. Sales increased 11% for
Chevrolet, 34% for Cadillac, 11% for Buick and 7% for GMC.
Silverado sales escalated 28% to 39,395 units.
GM's sales were helped by the recovering auto market in the U.S.
as well as by the unpopularity of the Japanese brands in China
due to a political conflict between China and Japan.
Auto sales in the U.S. rose 3.5% to 14.92 million vehicles in
April. Total vehicle sales went up 8.5% to 1.29 million vehicles
in the month. In China, General Motors and its Chinese joint
venture partners sold 261,870 vehicles in the month, up 15.3%
from Apr 2012.
Currently, shares of GM retain a Zacks Rank #3 (Hold). While we
remain on the sidelines about General Motors, stocks that are
currently performing well in the broader auto industry include
) with a Zacks Rank #1 (Strong Buy).