5 Manufacturing Stocks at Risk as Consumer Spending, Orders Decline

1. General Motors Company (NYSE:GM)

Number of Hedge Fund Holders: 75

On July 26, General Motors Company (NYSE:GM) reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of $1.14 and missed Wall Street expectations by $0.18. The company’s revenue for the quarter amounted to $35.76 billion and beat expectations by $1.41 billion. General Motors Company (NYSE:GM) reported that its U.S. vehicle sales fell by 15% year over year in Q2 2022 amid supply chain constraints and chip shortages.

As of August 19, General Motors Company (NYSE:GM) has lost 35.10% year to date and the company has negative free cash flows of $5.26 billion.

Wall Street is bearish on legacy automakers. On July 18, Deutsche Bank analyst Emmanuel Rosner downgraded General Motors Company (NYSE:GM) to Hold from Buy and slashed his price target to $36 from $57. Rosner sees automakers at risk to revive investor interest as the purchasing power of consumers weakens.

At the end of Q2 2022, 75 hedge funds held stakes in General Motors Company (NYSE:GM) worth $3.44 billion. This is compared to 76 positions in the previous quarter with stakes worth $5.50 billion. The hedge fund sentiment for the stock is negative.

In the second quarter of 2022, Berkshire Hathaway reduced its position in General Motors Company (NYSE:GM) by 15%, bringing its stakes to $1.67 billion. As of June 30, Berkshire Hathaway owns roughly 52.8 million shares of the company and is the largest shareholder.

Here is what Diamond Hill Capital had to say about General Motors Company (NYSE:GM) in its “Diamond Hill Large Cap Fund” first-quarter 2022 investor letter:

“General Motors—and the auto industry in general—continues to face headwinds related to supply chain disruptions and raw material cost inflation. In addition, uncertainty surrounding global energy markets due to inflation and the conflict in Ukraine has created a greater economic burden on consumers, which tends to slow automotive sales.”

You can also take a look at 15 Best Electric Car Stocks to Buy Now and Forget Tesla: 10 Cheap EV Stocks to Buy Now.

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