We recently published an article titled Greenhaven Associates: Top 10 Stocks to Invest in. In this article, we are going to take a look at where General Motors Company (NYSE:GM) stands against the other stocks.
Edgar “Ed” Wachenheim III is the founder, CEO, and chairman of Greenhaven Associates, a hedge fund management company that manages over $7 billion in investments. He serves as the vice chairman of the board of Central National-Gottesman, the chairman of WNET’s board, a trustee at the Museum of Modern Art, and a life trustee who previously chaired both the executive and investment committees of the New York Public Library. Additionally, he is a trustee emeritus and former vice chair at Skidmore College, as well as a trustee emeritus and past board president of Rye Country Day School. A notable figure in the investment community, Ed’s most recent, prominent achievement is the publishing of his book “Common Stocks and Common Sense” in 2016.
Wachenheim’s book, published by Wiley in April 2016, details his investment strategies and provides insight into his career as a successful value investor. In “Common Stocks and Common Sense”, he explains his approach to investing in undervalued companies that face a low probability of permanent loss, with a goal of achieving an annual return between 15% and 20%. He typically holds stocks for multiple years until they appreciate as expected and makes very few changes to his holdings in the shorter term. Even when his investment thesis proves incorrect, Wachenheim argues that his investments still tend to generate positive returns, given that the stock market has historically returned an average of 9% to 10% annually. His strong emphasis on downside risk and capital preservation is a hallmark of his investment philosophy. He also contributed a chapter to the 2017 book “Harriman’s New Book of Investing Rules”, and a second edition of his own book was released in 2022.
Greenhaven Associates was founded in 1987 as a branch of Central National-Gottesman, one of the largest global marketers and distributors of paper, packaging, wood, and metals. Wachenheim invests with a long-term time horizon of three to four years, disregarding short-term performance, analyst predictions, and hedge fund sentiment. This disciplined approach seems to work in Greenhaven Associates’ favor, as the hedge fund has achieved an impressive average annual return of approximately 19% between 1988 and 2017.
Beyond his career in finance, Wachenheim has been deeply involved in philanthropy and nonprofit leadership. He served on the Skidmore College board from 1993 to 2001, where three of his children studied, and later became vice chair and chair of the investment committee until 2003. He has also been a long-time supporter of Williams College, his own alma mater, where a new science center is named after him. Additionally, he is a life trustee of the New York Public Library, where the Trustees Room has been named in his honor. Wachenheim chaired the board of WNET, the PBS affiliate, from 2017 to 2022, having joined the board a year earlier.
His extensive philanthropic work includes serving on the boards of UJA-Federation of New York, the New York Foundation (1990–1999), and the Arthur Ross Foundation. He and his wife oversee the Sue & Edgar Wachenheim Foundation, a charitable organization with reported assets of $438 million in 2022. The foundation has directed significant contributions to cultural and educational institutions, including Williams College, Skidmore College, the Museum of Modern Art, WNET, and the New York Public Library.
According to its 13F filing for Q4 2024, Greenhaven Associates held stocks worth a total value of over $6.7 billion with stakes in 22 companies. Notably, the hedge fund’s recent portfolio modification has revealed that over 65% of its hedge fund is invested in just four stocks.
Our Methodology
The stocks discussed below were picked from Greenhaven Associates’ 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of Greenhaven Associates’ stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A group of technicians in a garage, inspecting car parts and ensuring safety compliance.
General Motors Company (NYSE:GM)
Number of Hedge Fund Holders as of Q3: 64
Greenhaven Associates’ Equity Stake: $1.26 Billion
General Motors Company (NYSE:GM) is the largest holding in Ed Wachenheim’s stock portfolio, operating as an automotive manufacturing company. Greenhaven Associates held over 23.72 million shares of the company as of Q4 2024 which constitutes 18.69% of the portfolio.
A leader in the automobile industry for over a century, General Motors Company (NYSE:GM) manufactures vehicles under world-famous brands such as Chevrolet, Buick, GMC, and Cadillac, along with Wuling and Baojun in China. The company operates through multiple joint ventures worldwide, including partnerships in China, India, Egypt, and South Africa. GM also owns OnStar, which provides in-vehicle communication and security services, and GM Financial, its auto financing subsidiary that operates in North America, Latin America, and China. General Motors Company (NYSE:GM) revenue streams primarily include vehicle sales, financing services through GM Financial, and its subscription-based offering known as OnStar, making it a diversified leader in the global automotive industry.
General Motors Company (NYSE:GM)’s revenue of $47.70 billion for the quarter ended December 2024 indicated solid business growth, especially as it demonstrates an increase of 11% year-over-year. The earnings per share (EPS) for Q3 2024 were $1.92, which exceeded analyst estimates of $1.84 by $0.08.
The company faced a challenging fourth quarter, largely due to significant losses from its Chinese joint ventures, resulting in a $5 billion restructuring charge and asset write-downs. Increased competition from domestic automakers like BYD, coupled with Chinese government subsidies supporting local manufacturers, has made the market more difficult for foreign brands.
Despite these setbacks, CEO Mary Barra emphasized the company’s progress in expanding its electric vehicle market share and restructuring efforts to improve its Chinese operations. Additionally, General Motors Company (NYSE:GM) announced plans to refocus its autonomous driving business, shutting down its costly robotaxi program to achieve $1 billion in annual savings. However, uncertainty surrounding U.S. trade, tax, and environmental policies has added further challenges, requiring proactive engagement with policymakers. While the company is committed to long-term growth, these financial letdowns have had a significant impact on its recent performance.
Hotchkis & Wiley Large Cap Value Fund stated the following regarding General Motors Company (NYSE:GM) 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.”
Overall GM ranks 1st on our list of Greenhaven Associates’ top stock picks. While we acknowledge the potential for GM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher 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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Disclosure: None. This article is originally published at Insider Monkey.
