General Motors Co Stock Hold Recommendation Reiterated (GM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- General Motors (NYSE: GM) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 21.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 $2.93 versus $4.62 in the prior year. This year, the market expects an improvement in earnings ($3.57 versus $2.93).
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Automobiles industry and the overall market, GENERAL MOTORS CO's return on equity exceeds that of both the industry average and the S&P 500.

General Motors Company (GM) designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. General has a market cap of $44.9 billion and is part of the consumer goods sector and automotive industry. The company has a P/E ratio of 10.8, below the S&P 500 P/E ratio of 17.7. Shares are down 0.6% year to date as of the close of trading on Thursday.

You can view the full General Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
null

If you liked this article you might like

Head-shaking Times; Thoughts on Autos: Doug Kass' Views

Driving This Beastly Cadillac CTS Reminded Me That Sexism Is Alive and Well

Your Complete Guide to Living Like Billionaire Warren Buffett

Irma and Harvey Busted Algos; Probably Done Deals Under Trump: Best of Cramer

Your Guide to Making a Lot of Money on the Driverless Car Boom