Was David Tepper Right About These 5 Stocks?

1. General Motors Company (NYSE:GM)

 No. of Hedge Fund Holders: 76

Performance of GM Over the Past 6 Months: +12%

General Motors Company (NYSE:GM), incorporated as a Delaware corporation in 2009, designs, builds and sells trucks, crossovers, cars, and automobile parts.

The company’s first-quarter results for 2022 were supported by improved production and solid customer demand in North America. For FY22, its net income is expected to come between $9.6 billion-$11.2 billion.

Analysts predict that high inflation and aggressive interest rate hikes by the US Fed can put pressure on the economy. This can have an impact on the company’s earnings. While General Motors Company (NYSE:GM) continues to struggle with higher costs for materials and supply chain issues, high inflation can make things even worse.

Oakmark Funds, an investment management firm, has released its first-quarter 2022 investor letter and mentioned General Motors Company (NYSE:GM). Here is what the fund said:

“General Motors (NYSE:GM) was a detractor during the quarter, due to increased macro uncertainty, higher fuel prices, and concerns over rising input costs, which pressured the company in particular and the auto industry as a whole. While we are closely monitoring the potential impact of these dynamics, industry demand remains robust, driven by strong consumer balance sheets and pent-up demand after multiple years of constrained production. We also remain confident in GM’s ability to navigate a complex operating environment, which the company has consistently demonstrated over the past few years. Finally, the long-term picture remains bright. We believe GM is significantly undervalued, is well-positioned for the long-term transition to electric vehicles and has numerous needle-moving ancillary business opportunities (most notably Cruise, which is an industry leader in autonomous vehicle technology) that are underappreciated.”

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