Oakmark Funds, an investment management firm, published its “Bill Nygren Market Commentary” fourth-quarter 2021 investor letter – a copy of which can be seen here. In the letter, Bill Nygren talked about Oakmark’s view on cryptocurrency, and why Oakmark calls itself a value investor. They also talked about the current investment opportunity, as well as how they differ from other investment firms. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Oakmark Funds’ Bill Nygren Commentary, in its Q4 2021 investor letter, mentioned General Motors Company (NYSE: GM) and discussed its stance on the firm. General Motors Company is a Detroit, Michigan-based automotive manufacturing company with an $88.6 billion market capitalization. GM delivered a 4.09% return since the beginning of the year, while its 12-month returns are up by 18.44%. The stock closed at $61.03 per share on January 12, 2022.
Here is what Oakmark Funds’ Bill Nygren Commentary has to say about General Motors Company in its Q4 2021 investor letter:
“When we started Oakmark, some of the businesses considered to be most predictable were newspapers, landline telephones and Pitney Bowes (machines to put postage on U.S. mail). Disruption risk is nothing new. Our process guards against it by forecasting many years into the future as opposed to assuming a low current P/E means a stock is cheap. Further, our recommendations must survive active peer debate and a devil’s advocate review where an analyst presents the negative case on stocks we consider buying. An additional layer of protection is that we only buy a stock when it is selling well below our estimate of intrinsic value.
Having said that, we often believe investors overreact to disruption risk. Examples include fossil fuel and internal combustion engine businesses. Current prices suggest that renewable energy and electric vehicles will be adopted at much more rapid rates than we consider likely. Beyond pricing in rapid extinction, investors often ignore the new technology R&D spending of incumbents. Examples include General Motors’ efforts in electric and autonomous vehicles. Our valuation process explicitly values emerging businesses, often exposing an unjustifiably low P/E for legacy businesses.”
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Our calculations show that General Motors Company (NYSE: GM) failed to obtain a mark in our list of the 30 Most Popular Stocks Among Hedge Funds. GM was in 77 hedge fund portfolios at the end of the third quarter of 2021, compared to 86 funds in the previous quarter. General Motors Company (NYSE: GM) delivered a 5.79% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on GM in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
