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GM - General Motors


PlanMaestro

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EV doesn't change b/c of pension deficit reduction due to rate increase - this can reverse anytime

and I don't want to call this an improvement

 

Although there were quite a lot of positive developments within GM over the last year, the enterprise value per share (incl. pension deficit) hasn't changed.

 

On an E.V./EBIT(DA) base, the shares even look cheaper than an year ago. Interesting.

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EV doesn't change b/c of pension deficit reduction due to rate increase - this can reverse anytime

and I don't want to call this an improvement

 

Although there were quite a lot of positive developments within GM over the last year, the enterprise value per share (incl. pension deficit) hasn't changed.

 

On an E.V./EBIT(DA) base, the shares even look cheaper than an year ago. Interesting.

 

is the reverse true as well? So when rates declined did you not view it as a negative?

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EV doesn't change b/c of pension deficit reduction due to rate increase - this can reverse anytime

and I don't want to call this an improvement

 

Although there were quite a lot of positive developments within GM over the last year, the enterprise value per share (incl. pension deficit) hasn't changed.

 

On an E.V./EBIT(DA) base, the shares even look cheaper than an year ago. Interesting.

 

is the reverse true as well? So when rates declined did you not view it as a negative?

 

Whatever the reason : E.V. per share didn't change.

 

Besides, even making abstraction of the change in pension deficit, valuation hasn't changed a lot over the last year. If anything, it looks somewhat cheaper.

 

Improvement : I'm sure you can think of some more important improvements within G.M. than higher interest rates (e.g. exit government, new models, Europe,...).

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I think in aggregate pricing and incentives are stable, so increased inventories by itself shouldn't be too much of a concern.

 

 

Well, as long as dealers have a lot of vehicles on their lot, they won't be buying more from GM.

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Obviously, I think that inventories need to be watched.  That said, if you listened to the FIAT call, one thing they are dealing with (and we saw a version of this at GM late last year), is that the model refreshes are causing some unique dynamics.  For example, Chrysler is shutting down a plant for 30+ days to retool a factory to build another model.  They have pushed inventory to the dealer lots to cover this 30 days of downtime.  Additionally, you get manufacturers trying to flush out their old models while preparing for the new ones.  We saw this in GM trucks last year.  There seem to be so many model refreshes happening, I wonder that this isn't going on across the system.  I have no real idea, but could be.

 

The weather will probably cause additional inventory build, so prepare for the numbers to look worse before they get better.

 

The one interesting thing I see -- is that every investment thesis for all of the manufacturers cite the new products resulting in taking market share.  This can't be true for everyone.

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Obviously, I think that inventories need to be watched.  That said, if you listened to the FIAT call, one thing they are dealing with (and we saw a version of this at GM late last year), is that the model refreshes are causing some unique dynamics.  For example, Chrysler is shutting down a plant for 30+ days to retool a factory to build another model.  They have pushed inventory to the dealer lots to cover this 30 days of downtime.  Additionally, you get manufacturers trying to flush out their old models while preparing for the new ones.  We saw this in GM trucks last year.  There seem to be so many model refreshes happening, I wonder that this isn't going on across the system.  I have no real idea, but could be.

 

The weather will probably cause additional inventory build, so prepare for the numbers to look worse before they get better.

 

The one interesting thing I see -- is that every investment thesis for all of the manufacturers cite the new products resulting in taking market share.  This can't be true for everyone.

 

Every company seems to be firing at all cylinders. Who are going to be the losers?

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This one has dropped quite a bit since Kyle Bass released its bullish report;

not sure if it's going back to sub 30, where the warrant will be interesting again

 

GM Steps Up Pickup Truck Discounts After Weak January

 

General Motors Offering As Much As $7,000 Off the List Price After Sales Slumped in January

 

http://online.wsj.com/news/articles/SB10001424052702304450904579369251781691482?mod=WSJ_business_MoreArticles

 

>:(

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