Mohnish Pabrai’s 5 Biggest Investments in 10 Years

3. General Motors Company (NYSE:GM)

Value of Pabrai Investment Funds’ 13F Position: $137 million (Q4 2013)

Stock Performance Since Q4 2013: -13.9%

Number of Hedge Fund Shareholders (Q1 2023): 75

General Motors Company (NYSE:GM) was another top stock pick of Pabrai’s throughout much of 2013-2017 before he unloaded the position in the third quarter of 2017. GM is another one of his picks that has delivered less than stellar returns over the years, losing 13.9% of its value since the end of 2013.

General Motors Company (NYSE:GM) shares are also down by about 14% in the last year alone, despite relatively strong results. Over the trailing twelve month period (through June 30) GM has grown revenue by 31% compared to the prior 12-month period, while its gross margin has expanded by 22% and EPS by 36%. Despite that, the stock trades at a price/sales ratio of just 0.32x, near a ten-year low and down from 0.46x a year earlier, while its P/E ratio has shrunk to 4.9x from 7.1x.

Diamond Hill took a stake in General Motors Company (NYSE:GM) in the second half of 2022 and explained why in its Q3 2022 investor letter:

“Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken steps necessary to focus the company on the most profitable segments and move into position to compete in an electrified and autonomous world. With the recent rise in interest rates there was a meaningful selloff in the auto industry, which presented us an attractive entry point to a name we know well.”