In spite of General Motors standing poised to retake the top sales spot, Chevrolet perhaps breaking its all-time sales record, and an anticipated Buick and two new Cadillac models coming, GM’s stock price got beat like a goat in 2011. On January 2, 2011 the stock traded at $37.06, on January 2, 2012, it hovered a few dimes above $20, making GM the worst-performing auto-industry stock of 2011: with a 46.1-percent drop, it edged out Cooper Tire (-41.7), TRW Automotive (-40) and Ford (-37.3).
The Motley Fool suggests the decline could be due to the Treasury’s ownership of hundreds of millions of shares, keeping investors wary about buying. Europe is also considered a sore spot, with GM’s operations on The Continent still in the red and there being no clear plan to turn that around (particularly with the Euro threatening to implode).
However, there is most likely more to it than that: many investors likely remaining unsure about company fundamentals, and they are likely concerned that GM (like Ford) is rated just below investment-grade by Moody’s rating service, which keeps some large institutional investors out of the pool. The good news for 2012: The General’ stock is trading at five times less than earnings and the outlook from all observers is uniformly positive.
autoblog
