SPY - General Motors Is Way Too Cheap To Ignore

2024-06-30 11:01:31 ET

Summary

• General Motors generates strong free cash flow and has repurchased a large percentage of shares outstanding.
• GM's stock is underappreciated and undervalued due to sentiment.
• GM benefits from a softening in EV market share growth and can benefit from gradual growth in EVs and robotaxis.
• GM's financial performance, balance sheet health, and investment in Cruise make it a good investment option.

Investment Thesis

General Motors ( GM ) generates enough free cash flow to make the stock significantly undervalued, in my opinion. The company has a strong reputation, loyal customers, and best-selling internal combustion ("ICE") trucks and SUVs. I think the stock remains undervalued despite the company’s solid financial performance, because the market holds higher than reasonable expectations for EV market share gains and may underappreciate the FCF generation abilities of GM. Perhaps Tesla ( TSLA ) stock is still soaking up much of the air regarding investments in the automotive industry. Meanwhile, GM just prints cash....

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