1. General Motors Co. (NYSE:GM)
Forward P/E Ratio as of March 7: 4.11
Number of Hedge Fund Holders: 68
General Motors Co. (NYSE:GM) is a global automotive manufacturer that is actively transitioning to EVs. It operates through various segments, which include GM North America. It designs, builds, and sells a range of vehicles, with an increasing focus on EVs under brands like Chevrolet, Cadillac, and GMC.
The company produced and wholesaled about 189,000 EVs in North America in 2024 and had its full year revenue grow by 9% year-over-year. It is launching lower-cost and longer-range versions of the Silverado EV, with work trucks offering ~500 miles of range. The company is also introducing the full Equinox EV and Blazer EV ranges, which include a more affordable Blazer. It’s expanding the GMC Sierra EV lineup. Cadillac’s EV portfolio is expected to drive luxury EV sales.
To boost sales, General Motors Co. (NYSE:GM) is training dealers on EV technology and charging. Chevrolet has met with over 7,000 sales employees. The company is also using its battery manufacturing joint ventures with LGES in Ohio and Tennessee to reduce cell costs and improve yields. In China, the company’s EV and plug-in hybrid sales have surpassed ICE models. It has reduced dealer inventory by over 50% to improve pricing and cost management.
Hotchkis & Wiley Large Cap Value Fund sees General Motors Co. (NYSE:GM) as an attractive and undervalued investment due to its strong market position, free cash flow, and management’s commitment to share repurchases. Here’s what it said in its Q3 2024 investor letter:
“General Motors Company (NYSE:GM) is one of the world’s largest manufacturers of passenger vehicles. GM reported a strong Q2; however, management provided a cautious outlook for the second half of 2024. Comments from GM mirrored those of other OEMs and auto suppliers, leading investors to believe the automotive cycle has peaked. We believe this is an overreaction, and we continue to view GM as an attractive investment. We like GM for many reasons. First, we believe GM has leading market positions in its main business segments. Second, the valuation is extremely attractive. Finally, it is a strong free cash flow generator, and the management team is committed to repurchasing their undervalued shares.”
While we acknowledge the growth potential of General Motors Co. (NYSE:GM), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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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