NEW YORK (TheStreet) -- General Motors Co. (GM) - Get Report shares are advancing by 1.29% to $31.72 on Wednesday, as the Detroit auto maker plans to spend $1 billion to increase production in India, Asia's third largest economy, The Wall Street Journal reports.
"GM cannot remain a global leader without making a serious commitment to expanding our presence in growth markets like India," CEO Mary Barra told the Financial Times.
With the $1 billion, GM is planning to launch 10 new Chevrolet vehicles in India. Recently, the company said it was closing its production facility in the western state of Gujarat and shifting its focus on on increasing production at its facilities in Maharashtra, the Journal added.
Overall, this investment is part of the company's bigger plan to target emerging markets such as China, Brazil, Mexico and India. GM announced yesterday that it will spend about $5 billion to jointly develop new cars for its Chevrolet line with China's SAIC Motor.
Separately, TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 301.8% when compared to the same quarter one year prior, rising from $278.00 million to $1,117.00 million.
- Net operating cash flow has significantly increased by 51.07% to $5,786.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.21%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, GENERAL MOTORS CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- GENERAL MOTORS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.41 versus $1.64).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: GM Ratings Report