RLT Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In the eight years since the Fund’s inception, the portfolio has finished the year in negative territory only twice. A return of 1.76% was recorded by the Fund for the fourth quarter of 2021, versus the S&P 500 TR Index which gained 11.03% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
RLT Capital, 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 a $67.3 billion market capitalization. GM delivered a -20.89% return since the beginning of the year, while its 12-month returns are down by -12.33%. The stock closed at $46.38 per share on February 23, 2022.
Here is what RLT Capital has to say about General Motors Company in its Q4 2021 investor letter:
“Despite my enthusiasm for GM’s competitive positioning in the years to come, it’s the decidedly unsexy legacy operations that keep GM’s cash registers ringing in the here and now. On that front, investor enthusiasm for the current manufacturing – and financing – of internal combustion engines remains pretty muted by most measures. And understandably so:
-GM’s operations are capital intensive,
-GM’s marketplace is highly competitive (and with excess capacity to boot),
-GM’s supply chain is super complex (e.g., semi shortage, tariffs, etc),
-GM’s labor force is (very) unionized,
-GM’s liabilities are aplenty and long-dated (e.g., warranties, recalls, lawsuits, etc),
-GM’s operations have ample – and unavoidable – commodity exposure (in both raw materials & the resulting impact on product demand/mix), and
-There’s no shortage of debt to consider.Although that hardly represents a comprehensive accounting of the risks that crowd GM’s disclosures, it’s more than sufficient to obscure the many positives to be found under GM’s hood. Of particular note is GM’s strong showing across seemingly every facet of the changes looming over the broader automotive industry:
-Internal Combustion Engines (ICE): If you think all the talk about electric and/or autonomous vehicles is either total hogwash or still decades into the future . . . GM’s legacy business has you covered. For as long as consumers continue to demand ICE powered vehicles, GM will capably meet said demand. In fact, despite the many headwinds faced by the entire automotive industry in 2021, GM still capably sold ~6.3 million vehicles, and generated ~$113.6 billion of automotive-related revenues…” (Click here to see the full text)
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Our calculations show that General Motors Company (NYSE: GM) ranks 28th on our list of the 30 Most Popular Stocks Among Hedge Funds. GM was in 90 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 77 funds in the previous quarter. General Motors Company (NYSE: GM) delivered a -25.42% return in the past 3 months.
In January 2022, 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.
