More Squawk from Jim Cramer: GM Stock a ‘Value Trap’

TheStreet’s Jim Cramer discusses GM's newly released U.S. June auto sales.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of General Motors (GM) - Get Report are gaining 2% to $28.86 on Friday morning after the automaker reported a 1.2% increase in U.S. June sales.

However, total sales were down 1.6% to 255,210 vehicles sold last month, while Wall Street was expecting sales to decline 1.3%.

GM is a "value trap," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning.

"The world has changed when it comes to cars. Millennials just don't buy them the way they used to and they need new innovation," Cramer added.

Uber has "really changed the world," according to Cramer, noting that the company is private, so some people say it's difficult to "get a beat on it."

"GM, when they put that money with Lyft, wasn't that to some degree a recognition of the future?" Cramer asked co-host David Faber, referring to GM's $500 million investment in the car-hailing service earlier this year.

But "now Ford is doing better than GM, I think," Cramer said.

Ford (F) reported a 6.4% increase in U.S. sales for June with 240,109 vehicles delivered. Wall Street was projecting a rise of 6.2%.

Shares of Ford are advancing 2.23% to $12.85 on Friday morning.

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on GM stock.

The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, attractive valuation levels and impressive record of earnings per share growth.

The team believes its strengths outweigh the fact that the company shows weak operating cash flow.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: GM

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