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
TheStreet Open House

GM's December Sales Dip Offers Buying Opportunity, Analyst Says

DETROIT (TheStreet) -- General Motors (GM) shares rose 2% in a down market on Monday, as investors re-evaluated after selling off shares on Friday.

December sales for the auto industry, which were reported Friday, disappointed, and none disappointed more than GM. Overall sales rose just 0.3%. But GM sales dipped 6%, missing Bloomberg consensus for a 6% gain. Hopes for GM have been high, as shares rose 38% in 2013.

Shares dipped 3.4% to $39.57 on Friday. They closed Monday at $40.40, up 83 cents.

On Monday morning, JP Morgan analyst Ryan Brinkman called Friday's dip a buying opportunity for GM and reiterated his overweight rating. Brinkman said the shortfall was explainable by pricing discipline, including a reduction in less profitable fleet sales, and by the lower-than-expected industry sales. GM raised incentives just 3.6% in December, while the industry increase was 6.6% while Ford's (F) increase was 23.6%, according to AutoData. Brinkman cited "admirable pricing discipline which should benefit [GM] in the long run."

Regarding December pickup truck sales, incentives were apparently a key factor in the combined 9% decline for Silverado and GMC Sierra, while F-Series sales rose 13%, Brinkman said. According to Autodata, GM cut incentives 17% on Silverado and 19% on Sierra, while F-Series incentives rose 11%. "We think GM pickup truck market share will improve sequentially in the months ahead," he wrote.

Most experts attributed the industry's disappointing December performance to a pull-ahead of sales into November. "The month did start a little bit low on retail side of the biz," said Kurt McNeil, GM vice president of sales operations. "Some of that may have been payback from very well executed black Friday marketing campaign. Sales did pick up after Christmas." Added GM chief economist Mustafa Mohatarem: "There was a lot of activity in the industry in November. We had promotional play and took full advantage of that."

For the full year, U.S. light-vehicle sales totaled 15.6 million, up 7.6% for the year, marking the fourth consecutive year of sales gains.

Looking ahead, Sterne Agee analyst Michael Ward said he expects "the modest and steady recovery to continue in 2014 and into 2015, reaching 16 million and 16.5 million units, respectively." A steady improvement in demand, positive pricing and declining costs should enable record financial results for the auto sector."

Written by Ted Reed in Charlotte, N.C.

To contact this writer,
click here.

Follow @tedreednc

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,031.14 +43.63 0.26%
S&P 500 1,984.13 -1.41 -0.07%
NASDAQ 4,518.9020 -48.6960 -1.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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