But given the situation and with the potential hit to its bottom line, I don't think the stock is cheap. Furthermore, it doesn't seem as though there will be any positive catalysts in the next one or two months.
The stock closed Wednesday at $34.88, down 14.7% year to date. It trades at 14.7 times last year's earnings.
The company has expanded its recall, and according to reports, the Department of Justice may press criminal charges against GM for failing to disclose a defect with its ignition switches.
GM now estimates it will take a $750 million charge for the first quarter, while the number of recalls has climbed to 6.3 million vehicles, 2.6 million of which are ignition switch related.
Now that the company's dirty laundry is coming public, the best course of action is surely to play an open hand and be as transparent as possible. The last thing CEO Mary Barra wants or needs is a scandal to start off her tenure as the leader of GM.
For now, I can't find a reason to love the stock at its current levels. When the news first broke of the investigations by the U.S. Attorney General and National Highway Traffic Safety Administration, it seemed as though everyone called the stock a buy. But there needs to be another reason to buy the stock.
And I don't think the stock has fallen enough yet, given the potential ramifications of the recalls. The stock is down only some two-odd percent over the last several weeks, despite federal investigations, additional recalls and the increased cost to fix the problems.