GM Hovering At 10 Is It Time To Get In On Stock

Investing in US automakers over the past 4 years has been dicey at best. The old saying of it being the darkest just before day break may apply at this time. Yes the US automakers posted their 10th straight decline recently and yes stocks are down for all US automakers across the board. Yes GM just posted another huge loss totaling 15.5 billion dollars which brings their grand total over the last 4 years to estimates over 70 billion dollars. That my friend is a huge amount of scratch!

There are signs however that things may start to turn around in the very near future and this may be a good time to jump on a low stock price and get ready for a wild ride back up the stock mountain. GM is what I will use as an example of what may be coming down the road soon in terms of a stock price turn around. GM finally made the announcement that they are cutting their mortgage arm GMAC and backing out of the housing market. They will be closing all 200 GMAC offices around the country by the end of this year and reducing their employee count by 5,000. GM also made the announcement that they will be investing another half billion dollars in the India automaker over the next 7 years as well.

Both presidential candidates are on board with the 25 billion dollars that were cleared by congress in 2007 for loans to automakers that would reduce their borrowing costs by more than $100 million per $1 billion borrowed and can be deferred for payments by the government for up to 5 years. GM also recently announced that plans for a 3rd shift for their plant in Ohio for their small fuel efficient cars. The Chevy Cobalt has been on the rise and a bright spot for GM all year. They are also on the cusp of releasing their first major entry into the hybrid market with the release of the Chevy Volt. Do a search on the Chevy Volt it’s going to be big, you’ll see. Finally the stock price for GM is hovering at a 4 year low of about 10.75, 8 years ago it was at a high of 93. It has been a slow 8 year decline for GM and at a stock price of 10 for a mega company like GM you may not ever get a better buy in price for their stock. Honestly do you really think that an automaker of that size will not be able to turn it around. The market is on the cusp of a major shift in technology moving away from fossil fuels into an alternative that will only raise the stock price for all the automakers across the board.

What are your thoughts on the status of the US automakers? Do you think things are going to start turning around for them in the next year or do you foresee a longer decline in the market? Automakers are starting to respond to demands for more fuel efficient cars with all major press reporting that fleets of new hybrids and other alternatives are due to hit the market within the next 1 to 3 years. Please share your opinions and thanks for reading.

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