Should You Invest Into General Motors (NYSE: GM)?Is Detroit vrooming again? Is the second lease of life long enough for GM: 33.79, -0.64? May be ‘yes'.
Yesterday, GM's share closed trading at $34.48, up by $0.209 or 0.85% sine its trading started on November 18, 2010. In the after hours trading, the stock almost regained what was lost in the yesterday's trading. Currently, the stock's one year consensus target price is at $43.5, compared to target range of $38 and $47.5. Year-to-date (YTD), consumer cyclical sector (29.26%) has outperformed S&P 500 (7.65%). Auto & Truck Manufacturers sector (25.83%) has also outperformed S&P 500. So, should you invest in GM share now?
Positive developments and indicators
Even those who were earlier strongly vocal about President Barack Obama's $50 billion bailout of the auto industry, now seem to be accepting the fact that the bailout has possibly put Detroit vrooming again. The light vehicle sales in the U.S. during November rose 17% to a seasonally adjusted annual rate of 12.3 million units, signaling a strong recovery in the industry. All the major automakers, except Toyota Motor Corp. (NYSE: TM), posted double-digit gain in sales. The industry witnessed a rebound in demand for sports utility vehicles (SUVs) and pickups during the month, which had been stunted as the global crisis set in.
General Motor's common stock got second lease of life as it began trading on November 18, 2010, on the New York Stock Exchange under the ticker symbol ‘GM' and on the Toronto Stock Exchange under the symbol ‘GMM'. Last month, General Motors announced that the underwriters exercised in full their over allotment options to purchase an additional 71.7 million shares of common stock from the selling stockholders, for a total of $2.37 billion, and an additional 13 million shares of mandatory convertible junior preferred stock from the Company, for a total of $650 million, in connection with the previously announced public offering of common and mandatory convertible junior preferred stock of General Motors.
Fuente:
http://www.istockanalyst.com/article/vi ... d/4724562#