This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Do Obama Haters Also Hate GM?

DETROIT ( TheStreet) -- Perhaps the biggest surprise among the profusion of auto industry numbers that surfaced Thursday was this one: GM (GM - Get Report) shares fell 4%.

The oddity was that GM not only reported a strong 18% August sales increase , but also said it has gained market share since it emerged from bankruptcy in November.

The stock price decline was apparently prompted largely by a Bloomberg story that said the company faces a pension shortfall up to $35 billion, which could delay a dividend or stock buyback.

Still, GM stock is down 37% for the year. It is down 34% since opening at $35 in November, during an IPO that accompanied the company's emergence from bankruptcy.

On Thursday, the shares gave up $1 to close at $23.03. "The stock shouldn't be trading at $23," said Standard & Poor's analyst Efraim Levy, after reiterating a strong buy.

Ford (F - Get Report) shares are down 36% for the year; on Thursday, they closed down 27 cents at 10.85.

GM's decline comes despite an 18% year-to-date sales gain and second-quarter earnings of $2.5 billion, marking the sixth consecutive profitable quarter. The company has nearly $34 billion in cash.

The market share gains are significant, given that many expected a continuing share loss following a restructuring when GM went from eight brands to four.

In 2009, GM board member Stephen Girsky said the company hoped to maintain a market share slightly above 19% upon emergence. In August, the U.S. market share was close to 20% and the year-to-date market share was 19.6%, said Don Johnson, vice president for U.S. sales, on the company's sales call Thursday.

In an interview, Levy said a "meaningful proportion" of GM's market share gains -- he wouldn't specify further than that -- results from the decline in availability of Japanese cars following the March earthquake and tsunami.

"GM benefitted from the misfortune of Japanese competitors -- that was a factor," Levy said. "But they did some things right as well. They have some good products that came to market at the right time."

A variety of auto analysts believe that investors are ignoring the GM story .

So permit us to promote a theory.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
F $16.14 -2.60%
GM $37.54 -0.17%
AAPL $128.50 -0.46%
FB $79.04 -0.89%
GOOG $569.75 -0.28%

Markets

DOW 18,206.55 -82.08 -0.45%
S&P 500 2,107.49 -9.90 -0.47%
NASDAQ 4,978.6720 -29.4240 -0.59%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs