5 Best Cyclical Stocks to Buy Now

1. General Motors Company (NYSE:GM)

Number of Hedge Fund Holders: 75

General Motors Company (NYSE:GM) manufactures and sells trucks, crossovers, cars, electric vehicles, and automobile parts and accessories in North America, the Asia Pacific, the Middle East, Africa, South America, the United States, and China. The company announced on September 23 that it will spend $760 million to renovate its Propulsion Systems factory in Toledo, Ohio, to build drive units used in electric vehicles. The plant will make drive lines for future electric trucks including the Chevrolet Silverado, GMC Sierra pickup, and GMC Hummer EVs.

Citi analyst Itay Michaeli on September 23 maintained a Buy recommendation on General Motors Company (NYSE:GM) but lowered the price target on the shares to $78 from $87. The analyst adjusted his traditional automaker and tier-1 supplier models to factor in reduced production estimates, mainly due to constrained supply chains in 2023, as well as a weak macro outlook in Europe. However, the analyst sees a comparatively better setup for automakers than suppliers, though he expects the setup to “evolve” as Q3 results near. He believes automaker fundamentals “still appear more macro resilient than what’s currently priced-in.”

According to Insider Monkey’s data, 75 hedge funds were bullish on General Motors Company (NYSE:GM) at the end of Q2 2022, compared to 76 funds in the last quarter. Harris Associates is one of the leading stakeholders of the company, with 43.6 million shares worth $1.4 billion. 

Here is what Chartwell Investment Partners has to say about General Motors Company (NYSE:GM) in its Q2 2022 investor letter:

“The three worst-performing stocks in the Dividend Equity accounts include General Motors (NYSE:GM, 2.4%), down 27.4%. GM posted solid first-quarter earnings, but supply issues continue to be a headwind and the market appears to be “pricing-in” at least a mild recession. The question seems to be: by the time the supply constraints are resolved, will we be in a much-worse economic scenario that will “hit” the demand side?

After a couple quarters of higher-than-average trading, Q2 was extremely light in both the Growth & Balanced and Dividend Equity accounts (see below). After trimming GM earlier in the year at much higher price levels, we added back to the position. Now trading at $32 per share, GM’s P/E multiple on 2022 earnings estimates is below 5 times its annual earnings per share, which we think is very attractive and is already pricing-in at least a mild recession.”

You can also take a look at 13 Best Cybersecurity Stocks To Buy and Best Cloud Stocks To Buy.

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