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The New General Motors Is Taking on the World

Stocks in this article: GM

Thanks to the determination and commitment of its leadership GM is selling at slightly below the July 25 52-week high of $37.71. In the latest quarter it booked EBIDTA (TTM) of $7.8 billion and net income available to common shares of $4.53 billion.

GM's diluted EPS (TTM) for the most recent quarter showed a drop of more than 23% yet it equaled $2.79 per share. Not too shabby in a worldwide economy that's been slowing down.

The chart below going back to late 2010 when it emerged out of bankruptcy illustrates how far GM's stock recovered to the point it's now trading at a one-year forward price-to-earnings ratio of around 8. GM Chart GM data by YCharts

It faces some stiff competition in the quarters ahead in improving its EPS and revenue-per-share. Yet shares of GM have a price-to-earnings-to-growth (PEG) ratio (5-year expected) of only 0.68. This suggests that the stock price isn't overvalued and may still be considered a bargain.

GM has worked hard to be a leader in its industry and it claims to know the definition of success. GM Chairman and CEO Dan Akerson says it best, "We win when the customer says we win."

At the new GM, the company has made a strong and open commitment to its customers, employees, partners and stakeholders. Its "five principles that guide us in everything we do":

  • Safety and Quality First
  • Create Lifelong Customers
  • Innovate
  • Deliver Long-Term Investment Value
  • Make a Positive Difference

So far so good, in my humble opinion, and that takes into consideration the imperfections as well. GM was prescient enough to sell more cars in China than any other U.S. car manufacturer while shining up its image at home for resilience, endurance and quality.

In the company's own words,

Our 212,000 plus employees work in 396 facilities touching six continents; they speak more than 50 languages and touch 23 time zones.
From designing and engineering state-of-the-art plants and developing new vehicles and technologies to creating new marketing programs, our team members are valued for their unique contributions.

With that attitude toward customers and employees GM's immediate future looks solid and shines bright. As long as it holds to the five principles that it claims guides them "in everything we do" the future may include the greatest accomplishments in its 105-year old history.

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