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If Auto Sales are So Hot, Why Isn't GM's Stock?

Tracey Ryniec and David Bartosiak, Stock Strategists at Zacks Investment Research, discuss General Motors (GM) amidst the hottest market for cars since 2000.

The company had another solid monthly sales report in November as truck sales rose 10% for their 20 th consecutive month of increase. SUV sales, especially in the crossover category, were up 35%, boosted by Cadillac.

But investors are worried about an "auto bubble" as US sales are sure to be in record territory this year. With lending rates poised to rise as the Fed raises rates, some are worried that consumers will shy away from buying cars in 2016. They fear this hot market has peaked.

Tracey argues that General Motors shares are cheap, with a forward P/E of just 7.5. Earnings are also expected to rise in the double digits again next year. It even pays a juicy dividend, yielding 4%. What's not to like?

David takes a look at the chart. Is there momentum in the shares? Or has the good news been priced in?

Is General Motors stock a hidden gem or a value trap?

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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