NEW YORK (TheStreet) -- General Motors (GM - Get Report) shares are down 0.45% to $33.08 in morning trading on Monday after the U.S. automaker announced that Chinese June auto sales were flat from the year ago period despite aggressive price cuts and renewed focus on the country.
The company sold 246,066 vehicles in the country in June, roughly the same amount from the year ago period.
In May, GM announced plans to cut prices on 40 vehicle models sold in the country by up to 20% to combat flagging sales amid a slowing Chinese economy.
While year over year monthly sales were sluggish, GM has sold 1.72 million vehicles during the first six months of the year, a 4.4% increase from the year ago period.
Insight From TheStreet Research Team:
Here is what analyst Doug Kass had to say about GM:
"General Motors has missed consensus expectations for its June auto sales. I've been wrong so far about going long on GM, but I'm sticking with the position," said Doug Kass
-Doug Kass,'Daily Diary', 7/1,2015
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 some important positives, 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 increase in net income, impressive record of earnings per share growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its 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 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 343.7% when compared to the same quarter one year prior, rising from $213.00 million to $945.00 million.
- 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 ($4.49 versus $1.64).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.8%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Even though the current debt-to-equity ratio is 1.33, it is still below the industry average, suggesting that this level of debt is acceptable within the Automobiles industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.79 is weak.
- You can view the full analysis from the report here: GM Ratings Report