NEW YORK (TheStreet) -- GM (GM) - Get Report shares are up by 1.08% to $31.37 in afternoon trading on Tuesday, after the American auto maker announced that it will invest $5 billion in order to gain a foothold in emerging markets.
The company will double its investment in Brazil's emerging auto market to $3.8 billion by 2018 as part of the plan, though GM said that its investment in Brazil will focus on developing new technologies rather than increasing capacity.
The other developing markets the company intends to invest in includes China, Mexico and India.
New vehicles produced under the investment plan will be under the GM Chevrolet brand and will range in size from compact cars to sport utility vehicles, according to CNBC.com.
"The central theme here is starting with what we think will be the customer requirements in different markets and working backwards from there to figure out how we deliver to those requirements at a value point that will allow us to make a good return on our investment," GM President Dan Ammann said in a statement.
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