1. General Motors Company (NYSE:GM)
Forward P/E: 4.91
Number of Hedge Fund Holders: 72
Cramer has previously called General Motors Company (NYSE:GM) “tempting”, saying:
“Hey, you know what tempting is? General Motors. They hold an analyst meeting [on] Tuesday. GM’s having a great year. [The] stock’s up 27%. I think the redoubtable CEO Mary Barra will tell a strong story… The company’s been able to put up quality numbers even when interest rates were higher. So who knows how well it can do now that the Fed’s our friend. Holy cow. Hey, by the way, unlike Ford, GM has a substantial buyback, which has clearly helped in stock. By contrast, Ford stock’s down 13% for the year. Given that GM still trades at less than five times earnings, and as long as Barra doesn’t cut the forecast, I think the stock can only go higher.”
General Motors (NYSE:GM) is focused on the development, manufacturing, and marketing of vehicles, including trucks, crossovers, cars, and essential automotive components. At a recent investor event in Spring Hill, Tennessee, Mary Barra highlighted the ongoing evolution of the company’s financial performance, mentioning that profit margins for traditional internal combustion engine (ICE) vehicles have room for further growth. Additionally, she pointed out the accelerating sales of electric vehicles (EVs), noting that profits for 2025 are projected to remain comparable to those of 2024.
In October, General Motors (NYSE:GM) announced that it entered into a partnership with Lithium Americas Corp. to establish a joint venture aimed at financing and developing the Thacker Pass lithium project in Nevada. The collaboration involves an investment of $625 million from the company, which breaks down into $430 million in direct cash contributions and a $195 million letter of credit to bolster the project’s funding. Additionally, the agreement includes a conditional commitment for a $2.3 billion loan from the U.S. Department of Energy, further strengthening the financial foundation of the initiative.
Under the revised agreement, GM will secure a 38% stake in the Thacker Pass project, a shift from a previous commitment of $330 million made under an earlier investment agreement. The latest investment complements General Motors’ (NYSE:GM) earlier contribution of $320 million in February 2023, which granted the company approximately 15 million common shares of Lithium Americas. Furthermore, the company has extended its offtake agreement to cover up to 100% of the production from Phase 1 for a duration of 20 years, while also committing to a new 20-year offtake agreement for 38% of production from Phase 2.
While we acknowledge the potential of General Motors Company (NYSE:GM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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