5. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 78
General Motors Company (NYSE:GM) is a leading American automotive manufacturer, headquartered in Michigan. It takes the 5th spot on our list of best consumer discretionary stocks according to hedge funds. The company produces vehicles under well-known brands such as Chevrolet, GMC, Cadillac, and Buick. In addition to its American brands, the company holds significant stakes in Chinese automotive ventures, including Baojun and Wuling through a joint venture with SAIC. In addition, the company also oversees the production of delivery vans, defense vehicles, and auto parts.
Despite facing challenges, such as losing its title as the world’s largest automaker to Toyota (NYSE:TM) in 2008 and navigating bankruptcy in 2009, General Motors (NYSE:GM) has remained resilient. It is now focused on innovation, particularly in electric vehicles, with plans to transition away from internal combustion engines by 2035 and achieve carbon neutrality by 2040.
General Motors (NYSE:GM) has been adjusting its focus as it navigates the transition to electric vehicles. Despite a promising 40% increase in electric vehicle deliveries, which reached 22,000 units in the second quarter, it is the company’s gasoline-powered vehicles that are driving substantial profits.
Owing to its internal combustion engine (ICE) division, General Motors (NYSE:GM) reported a significant boost in its earnings before interest and taxes (EBIT), reaching $4.4 billion for the second quarter. This represents a 37% increase compared to the previous year, largely fueled by strong demand for its pickup trucks and SUVs.
The GMC Sierra and Chevrolet Silverado are leading the charge in this segment. The GMC Sierra achieved its best first-half sales ever, while the Chevrolet Silverado posted its strongest sales since 2021.
General Motors’ (NYSE:GM) emphasis on internal combustion engine vehicles remains strong, with a steady stream of new and redesigned models entering the market. In the second quarter, eight new crossover models were introduced, including key vehicles like the Chevrolet Traverse, GMC Acadia, Buick Enclave, and Chevrolet Equinox.
By maintaining a strong lineup of profitable gasoline-powered vehicles while gradually expanding its electric vehicle offerings, General Motors (NYSE:GM) is positioning itself well for future growth. The company’s approach ensures continued profitability and market presence as it adapts to evolving industry trends.
As of Q1, General Motors (NYSE:GM) stock was held by 78 hedge funds at a combined value of $4.8 billion. Harris Associates holds the most prominent stake in the company with 35.5 million shares worth $1.61 billion as of the first quarter.
Diamond Hill Large Cap Strategy stated the following regarding General Motors Company (NYSE:GM) in its first quarter 2024 investor letter:
“Other top contributors included Allstate, Caterpillar and General Motors Company (NYSE:GM). Automobile manufacturer General Motors continues capitalizing on the shift to electric vehicles (EVs) while maintaining the strength of its core gas-engine truck and SUV business. Though it has experienced some setbacks — such as needing to roll back its Cruise driverless car project — we believe the company remains well-positioned relative to secular tailwinds within the automobile business.”
