I'de rather buy some almost land in Florida..
Would You Purchase GM Stock
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As GM fails to meet sales forecasts their stock will continue to plummet. With an inventory of large SUVs and trucks, and fuel at record highs, most likely projected to go even higher with the onset of Memorial Day weekend, gravity will have its affect. I don't see enough in their passenger car lineup that will makeup for the shortfall. I would be more prone to look at Ford with their new Mustang and variations of the 500 line.
No, I wouldn't jump on a sinking ship.
If you are in it for the long term it can sometimes be good to buy troubled stocks! Look at Ford! I know people that waited until they bottomed out at something like $3-$6 a share and have made a fortune. Semi-COnductors are down right now as well! I doubt they will stay down forever so they too might make a good buy longterm.
If you normaly like to look for side trends and get in and get out then I doubt GM or semiconductors are the investment for you. All of this assumes that you have dispossable income to spend as well!
If you normaly like to look for side trends and get in and get out then I doubt GM or semiconductors are the investment for you. All of this assumes that you have dispossable income to spend as well!
I had also thought about picking up some GM shares but was turned off last week when the Pres. of GM (I can't remember his name) stated that they see SUV's as a big part of their future(paraphrasing). GM's attempt at an electric vehicle a few years back was a disaster. Honda and Toyota got it right with their hybrids. I think I would pass on GM stock until their management realizes just how serious this current gasoline situation is.
JHZR2
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I bought Merck when it bottomed, and have made a nice profit.
At the price, if they could keep some sort of dividend, and you could reinvest it, you might do relatively well. However the div is surely to be severely reduced, based upon losses.
I doubt that GM will disappear, go out of business, etc. They may pull a Chrysler if necessary, but I doubt it. Their board of directors and the overwhelming requirement to please shareholders is what really brought their decline. WIth restructuring, they very well may come back strong. Depends on the next few models that come out, and their ability to get rid of the gas guzzlers.
If fuel cells become popular over the next number of years, theyll bebest poised for a BIG win.
Its a tough call. Sometimes you can do well buying into panic, other times, you just sink with everyone else.
JMH
At the price, if they could keep some sort of dividend, and you could reinvest it, you might do relatively well. However the div is surely to be severely reduced, based upon losses.
I doubt that GM will disappear, go out of business, etc. They may pull a Chrysler if necessary, but I doubt it. Their board of directors and the overwhelming requirement to please shareholders is what really brought their decline. WIth restructuring, they very well may come back strong. Depends on the next few models that come out, and their ability to get rid of the gas guzzlers.
If fuel cells become popular over the next number of years, theyll bebest poised for a BIG win.
Its a tough call. Sometimes you can do well buying into panic, other times, you just sink with everyone else.
JMH
I've actually been thinking of going short on this one. I don't think the worst has come out about GM yet.
The problem with waiting for new models is that those new models will be more big suvs and trucks. you think they have anything in the pipeline that is going to be a runaway winner that can compete effectively with the imports ? I certainly don't. They already start off with a major liability with their retirees and benefits.
The bad news is already factored in the price of the stock. However, it is difficult to predict the bottom. The stock could decline further from current levels. They are losing domestic market share to the import brands, the health care benefits for current and retired employees are spiraling out of control. GM has about 2.5 pensioners per employee; the more the company retrenches and downsizes, the higher this ratio becomes. In the late 90's they agreed with the union to provide extremely generous health care benefits for retirees and current employees through 2007. The late 90's were highly profitable as gas prices were low, and demand for VERY profitable SUV's was high. The import brands now compete fiercely in every segment of the SUV niche. On the plus side, they have cut losses in Europe, and are doing better in Latin America and are profitable in China. The GMAC financing arm is also profitable. Long term, the company can be viable and turn around; that is if they don't go bankrupt before that happens.
A bet on GM is a bet on hydrogen. Unfortunately, I am afraid they are shooting themselves in the foot again.
I've picked my share of stocks that were low....that turned out to be real dogs.
GM just doesn't have the growth fundementals right now.
GM just doesn't have the growth fundementals right now.
The price of GM stock is trading at roughly 1/2 the price it did last summer, so it might be a good value. However, the downward trend could continue, so it is a risky proposition.
Would you buy this stock at the current price? What say you?
[ April 24, 2005, 12:36 PM: Message edited by: DockHoliday ]
Would you buy this stock at the current price? What say you?
[ April 24, 2005, 12:36 PM: Message edited by: DockHoliday ]
If GMs stock was doing good I probably wouldn't be in it. I haven't had good luck with their products. It's headed lower. Gas prices will continue to rise over the summer driving season and GM is sitting on a backlog of trucks and suvs.
Look at what GM is doing. They cut costs by consolidating. They took the panache out of individual brand identities. Now because all GM products resemble one another, they are cutting brands, and consolidating further.
The bean counters and production engineers seem to be in control.
Marketing seems to have stultified. Meanwhile, competion is eating away at their market share in the US. GM seems to be on a path to compensate via world wide sales and brand purchases.
Will they be successful? Therein lies the future.
My 2 cents...
The bean counters and production engineers seem to be in control.
Marketing seems to have stultified. Meanwhile, competion is eating away at their market share in the US. GM seems to be on a path to compensate via world wide sales and brand purchases.
Will they be successful? Therein lies the future.
My 2 cents...
At this point GM is just another dog with fleas. Kind of wish GM engineer was around to give us the benefit of his 'insight'.
I believe you nailed it with your last comment. What does GM have in the pipeline that will turn things around for them? I sure don't see them.
While I like to buy stocks that are "on sale" I'm not convinced that GM has hit bottom...
I am not into stocks, but with GM's launch of the new lower priced Hummer, the H-3, in mid May, things may be on the upswing:
Hummer H-3
Hummer H-3
I think I will wait until they cut their dividend, which is around 5-6%. When that happens, I will jump in with both feet and buy. I have done that with Phillip Morris, Kodak, Ford, and Merk and have been quite pleased with the results. The market overreacts to both good and bad news.
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