GM: General Motors Is Off to a Bad Start in 2015

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General Motors Company (GM) clearly wasn’t ready to start the New Year. Last week, General Motors announced yet another recall, pointing to ignition defects that impacted more than 92,000 trucks and SUVs.

General Motors gm stock gm earningsIs GM digging itself into an even bigger hole?

General Motors’ Company Profile

Once a global institution, General Motors is an American car-maker with roots tracing back to 1908. General Motors is behind household car names like Cadillac, Chevrolet and GMC in the U.S. as well as Opel and Vauxhall in Europe.

Currently, General Motors employs just over 210,000 worldwide and operates in just under 160 countries. Income -seekers may note that General Motors pays a 3.7% dividend, but I don’t consider that enough of a reason to buy GM shares now.

General Motors’ Earnings Outlook

General Motors has had a tough time as of late. GM had 20 million recalls from last year alone, and then started off 2015 with another recall announcement.

Despite setbacks, GM stock’s performing fairly well. In the third quarter, General Motors beat analysts’ earnings-per-share estimates by 2%.

Looking ahead to fourth quarter results, analysts estimate GM stock’s earnings to be 84 cents per share, down from the third quarter’s 95 cents per share, but up by 20% from the same quarter last year.

Analysts estimate fourth-quarter revenue of $40.22 billion, and growth estimates for the quarter seem to be on par with industry and sector trends at 25.4%.

General Motors’ Current Ratings

General Motors has been struggling over the past 12 months, consistently earning an F for its Quantitative Grade, which indicates poor buying pressure behind GM stock.

Meanwhile, General Motors continues to struggle in terms of its fundamentals. GM stock does have bright spots, including strong earnings growth (A), earnings momentum (B) and return of ratio (B).

However, GM stock outright fails when it comes to operating margin growth and needs to improve in sales growth (D), analyst earnings revisions (D), cash flow (D) and earnings surprises (D). Overall, General Motors earns a C for its Fundamental Grade.

As of this posting, Jan. 5, 2015, I consider GM an D-rated “sell.”

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip GrowthEmerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


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