NEW YORK (TheStreet) -- Shares of General Motors (GM) fell 0.76% to $31.16 in afternoon trading Monday after the company missed expectations for October auto sales despite U.S. automakers reporting their best October sales in years.
U.S. sales of the six largest automakers measured by U.S. market share rose 6% year-over-year, which matched analysts' expectations, according to Reuters.
GM sales ticked up 0.2% compared to October 2013 to 226,819 vehicles, which missed the consensus estimate of analysts polled by Thomson Reuters by more than 5,000 vehicles. GM announced it would execute plans to increase profit at the cost of total sales by decreasing fleet sales of its large SUVs.
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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 several positive factors, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
- 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 $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $2.35).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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.
- The gross profit margin for GENERAL MOTORS CO is rather low; currently it is at 16.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.74% trails that of the industry average.
- You can view the full analysis from the report here: GM Ratings Report