Is General Motors hot?

-

 


    General Motors Inc(Ticker:GM) recently closed down three of their power plants because of chip shortages for their vehicles. They also predict a 1.5 to 2 billion dollar reduction in their 2021 earnings because of these chip shortages. The closures make GM seem like a sell, but the drop in their stock price will opens an opportunity available to invest in GM stock before it gets too high as it has been rallying for the past month. 
    
    The positive aspect that comes from these chip shortages is that it displays the high demand for GM vehicles which will mean that they will likely produce stronger sales when they are able to receive more chips.

    With the release of their 4th quarter earnings this week, GM surprisingly beat the predicted earnings and was even able to beat 2019 earnings despite COVID-19. Also, their global sales increased by 4%. 

    GM's launch of their new EV vehicles are off to a interesting start with them promoting their EVs in their Super Bowl ad with Will Ferrell. GM's early shift towards the EV business showcases their ability to quickly adapt to the future trends, and it is promising as their aggressive approach will position them well in the EV market.

    Their controlling stake in Cruise, self-driving car business, shows promise for their EV business as Microsoft Corp invested in the business last month.

    If we go into the numbers, GM is currently priced at $52.88. GM's P/E ratio of 12.37 looks like a steal because it stocks isn't overpriced. Also, GM's dividends are tasty with a 2.84% return which is getting you some cash when waiting for their stock to skyrocket.

    From 16 analysts, GM stock is predicted to 20-50% within the next 12 months and 16 our of 17 analysts recommend a buy rating on the stock(CNN Money).

    Overall, GM has a good long-term outlook making it a strong buy.

Comments

Post a Comment

Popular posts from this blog

Is Iron Mountain Inc (IRM) a safe stock to invest in?

-
Image
  In the wake of the pandemic, people are using technology more than ever whether it is zooming at home or watching Netflix. Consequently, all these technology companies collect data from users in order to help improve their experience or even sell it to 3rd parties. Gathering all this data means that companies have the responsibility to protect the consumer by keeping their data safe from hackers or other entities.  Iron Mountain Inc(IRM) is an international company that "stores, protects and manages, information and assets". Over 7,500 companies use the services provided by Iron Mountain and out of the 7,500 companies, a majority of the companies are in the Fortune 1000. As the world becomes digitalized, more companies will need to use the services provided by IRM which will help their future sales and show that they have the demand in the future.  With a juicy dividend yield of 5.78%, it has similar dividend yields of oil companies, but without the volatility of o...
Read more

Does heavy spending by Oracle signal long term upside?

-
Image
  Oracle (ORCL) has recently increased its investments while many other technology companies right now are cutting down their investments and playing it safe. Oracle is a database and cloud software company based in Austin, Texas, and its main competitors in the cloud industry are Amazon, Microsoft, and Google.  Back in June, Oracle purchased Cerner Corporation, a healthcare records company for roughly $28 billion with the hopes of strengthening its cloud services. Although Oracle only makes up 2% of the cloud market, Oracle aims to compete with Amazon, Microsoft, and Google by building smaller data centers in more regions (Statista). By doing so, Oracle currently has data centers in 40 regions which is almost double the amount AWS has.  Expanding data centers does come at a cost since Oracle has spent over $2.44 billion in capital expenditures during the 2nd Quarter which is a 163% increase in their capital spending. The increase in spending has put Oracle as #1 for the ...
Read more

Micron Technology: One of the Biggest Hidden Stocks of this Year

-
Image
I believe Micron Technology(MU), a semiconductor producer, is a good investment because there is a long-term upside to the stock. Top U.S. semiconductor companies like AMD outsource their semiconductor manufacturing to Asian countries like China, but the U.S. and China’s relationship has soured which is causing the U.S. to focus on production here. To boost U.S. chip manufacturing, Micron has received a subsidy from the Biden administration which has allowed them to expand their market share in semiconductor production by investing $40 billion into building more chip-making factories in the United States. With U.S. companies focusing on buying semiconductors in the United States, Micron's large market share will help them sustain long-term growth in sales. Subsequently, it will boost investor confidence in the stock which will lead to stock gains. Although Micron’s stock has dipped in the past year due to a decrease in computer demand caused by lifted lockdown restrictions, this pr...
Read more