hyten1 Posted February 10, 2014 Share Posted February 10, 2014 fyi " In a note to investors, Citigroup analyst Itay Michaeli wrote ... GM's new pickup trucks, launched about 6 to 9 months ago, used to sell for $4,000 less than Ford's (F) pickup trucks, but now sell for about the same price as Ford's trucks, the analyst explained. As of January, the average transaction price of GM's pickups were up $5,000 versus January 2013, Michaeli wrote. Moreover, prices of vehicles typically peak 6 to 9 months after their launches, so price cuts at this point in the vehicles' cycles are somewhat typical, he contended." http://blogs.barrons.com/stockstowatchtoday/2014/02/10/general-motors-how-worrisome-are-its-truck-discounts/?mod=yahoobarrons&ru=yahoo Link to comment Share on other sites More sharing options...
bmichaud Posted February 10, 2014 Share Posted February 10, 2014 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 >:( Are you implying the "common" is attractive here but the "warrant" is not? And thus sub-$30 the warrant will be more attractive than the common? Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 11, 2014 Share Posted February 11, 2014 GM’s China Sales Rise 12% to Record in January on Buick Demand http://www.bloomberg.com/news/2014-02-11/gm-s-china-sales-rise-12-to-record-in-january-on-buick-demand.html Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 12, 2014 Share Posted February 12, 2014 Car Makers Snip Pricing Now to Avoid Haircuts Later As Inventories Rise, Detroit Searches for a Goldilocks-like Pricing http://online.wsj.com/news/articles/SB10001424052702304558804579377293202213988?mod=WSJ_business_whatsNews Link to comment Share on other sites More sharing options...
moody202 Posted February 13, 2014 Share Posted February 13, 2014 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? Part of it is the rising tide where the annual sales are just higher than last year. Auto industry sales are measure as SAAR which was 15.6M for 2013 and is expected to be 16+M for 2014! Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 18, 2014 Share Posted February 18, 2014 GM Secures Aluminum for Trucks Auto Maker Steps Up Effort to Use Metal in High-Volume Pickups http://online.wsj.com/news/articles/SB10001424052702303491404579391144135588938?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 24, 2014 Share Posted February 24, 2014 "Peak Car" http://www.bloomberg.com/news/2014-02-24/woes-of-megacity-driving-signals-dawn-of-peak-car-era.html Woes of Megacity Driving Signal Dawn of ‘Peak Car’ Era Link to comment Share on other sites More sharing options...
Avyalake Posted March 9, 2014 Share Posted March 9, 2014 Old GM, New GM For GM, a need to show sense of urgency http://www.autonews.com/article/20140308/OEM/303109990/for-gm-a-need-to-show-sense-of-urgency Not even two months into her tenure as CEO, the crappy cars of old GM are having their revenge on the born-again automaker, with a global recall of 1.6 million cars over a deadly, decade-old ignition problem threatening to overshadow GM's painstaking advances in quality and customer satisfaction. ... Until last month, the vehicles under recall -- including the Chevrolet Cobalt, rated least reliable small car in 2006 by Consumer Reports, and the Saturn Ion, Edmunds.com's choice as the sixth-worst car ever sold in America -- were merely unpleasant memories that today's GM was eager to erase. But documents that have emerged in conjunction with the recall and related lawsuits have also spotlighted a sluggish management culture that kept urgent quality and safety issues from receiving attention from the highest levels of the company. ... After first letting Alan Batey, GM's North American president, speak for the company in a nationally published apology, Barra last week said she has assembled and taken charge of an executive team to direct GM's response to the recall. In her message, she told employees that doing "what is best for our customer" will come above all else. Link to comment Share on other sites More sharing options...
Avyalake Posted March 9, 2014 Share Posted March 9, 2014 If the handling by GM is not perceived to be transparent and reasonable, this could blow up? Bankruptcy terms limit GM liability in crash lawsuits http://www.autonews.com/article/20140308/OEM11/303109989/1580 ... Under the terms of its restructuring, GM's product liability extends only to accidents that happened after the reorganized company left bankruptcy in July 2009. Plaintiffs injured before that time would have to seek redress from the defunct shell of GM in Bankruptcy Court, where the chance of compensation is slim. ... GM says that it knows of 31 accidents in which airbags didn't deploy because of the faulty switch, and that 13 people died in these accidents. The company hasn't released data that would show how many of the accidents predate GM's emergence from bankruptcy. At least one fatality that GM has linked to the Cobalt recall occurred in December 2009. Link to comment Share on other sites More sharing options...
moody202 Posted March 9, 2014 Share Posted March 9, 2014 I have heard a lot about new GM...but is it really the new GM? I just finished a 2 week trip to India, GM doesn't have a good reputation there. People are not buying Chevy's. Toyota seems to the be the brand of choice. This makes me nervous! Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 10, 2014 Share Posted March 10, 2014 What is going on with the B warrants... Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 11, 2014 Share Posted March 11, 2014 http://www.bloomberg.com/news/2014-03-11/gm-recalls-stalled-in-10-years-of-committee-alphabet-soup.html GM Recalls Stalled in 10 Years of Committee Alphabet Soup Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 12, 2014 Share Posted March 12, 2014 screenshots Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 12, 2014 Share Posted March 12, 2014 Replacement Part in GM's Car Recall Costs About $2 to $5 Price Could Provoke More Questions About Why the Problem Wasn't Fixed Years Ago http://online.wsj.com/news/articles/SB10001424052702304914904579435171004763740?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj Link to comment Share on other sites More sharing options...
buylowersellhigh Posted March 13, 2014 Share Posted March 13, 2014 screenshots Anybody buying the B warrants? Link to comment Share on other sites More sharing options...
moody202 Posted March 13, 2014 Share Posted March 13, 2014 I saw a Barron's article today recommending selling Jan'15 $30 Puts and Jan'15 $40 Call's to profit from the current situation. Total gain could be $3.42 on this strategy. Any insight you guys can provide on this trade? Link to comment Share on other sites More sharing options...
Rainforesthiker Posted March 13, 2014 Share Posted March 13, 2014 I bought some B warrants today; it seems that the crowd has likely over-reacted to the recall and some short term issues. Anybody buying the B warrants? Link to comment Share on other sites More sharing options...
vinod1 Posted March 14, 2014 Share Posted March 14, 2014 Using Morningstar's 2014 sales estimate of 158,561, a 7% mid-cycle EBIT margin, interest expense of 530, a 40% tax rate and after-tax JV earnings of 1,995, I get to $4.50 EPS with 1,853 shares outstanding. That rises to $6.04 assuming a 10% m-c EBIT margin. Though 10% seems unrealistic anytime soon given how bad Europe is. Hence why I can't conservatively get to Einhorn's $6. Agreed on CAPEX v. D&A, but difficult to ascertain in the medium term given the investments required to rationalize the global manufacturing platform and revamp product. 2011 D&A was $7.4B and Morningstar estimates "steady-state" capex of $8B, so not a huge difference. My understanding is that the Chinese JV equity income in already included in GM International (GMIO) EBIT. In the supplementary material there is a reconciliation from operating segments EBIT to net income and I do not see the equity income separated out. Other wise I think you might be double counting this portion of the earnings. Thanks Vinod Link to comment Share on other sites More sharing options...
dpetrescu Posted March 14, 2014 Share Posted March 14, 2014 I'm would like to buy more GM but not sure when. I'm thinking of waiting another 10% lower. How low does everyone think GM could go based on the recall issue? Link to comment Share on other sites More sharing options...
wbr Posted March 14, 2014 Share Posted March 14, 2014 I'm would like to buy more GM but not sure when. I'm thinking of waiting another 10% lower. How low does everyone think GM could go based on the recall issue? The recall makes headlines, but is overall a very minor issue when it comes to the value of the company. The balance sheet is stronger than ever and future cashflows will not be materially impacted by this issue. There are always recalls happening in the car industry and the media likes to sensationalize them but consumers will forget soon. In my opinion it doesnt matter whether you think GM is going lower or not, because nobody knows how much people will freak out about the recall media coverage and what the market in general is doing now. I make my decisions based on my position size. If you have no position, I would definitely take a bite now. If you have half a position I would buy some more too and when you have a full position or even an oversized one then you can afford to be a bit more patient and buy when it gets really attractive below 30. Selling puts with strikes below 30 is also an option when your position is already big. Link to comment Share on other sites More sharing options...
hyten1 Posted March 14, 2014 Share Posted March 14, 2014 anyone familiar with FARS http://www-fars.nhtsa.dot.gov/Main/index.aspx trying to get data on fatality due to non air bag deployment of other automakers and models. hy Link to comment Share on other sites More sharing options...
plato1976 Posted March 14, 2014 Share Posted March 14, 2014 Well, the estimation is a few dollar impairment, not sure how they got this estimation a few dollar is not big but still sth I'm would like to buy more GM but not sure when. I'm thinking of waiting another 10% lower. How low does everyone think GM could go based on the recall issue? The recall makes headlines, but is overall a very minor issue when it comes to the value of the company. The balance sheet is stronger than ever and future cashflows will not be materially impacted by this issue. There are always recalls happening in the car industry and the media likes to sensationalize them but consumers will forget soon. In my opinion it doesnt matter whether you think GM is going lower or not, because nobody knows how much people will freak out about the recall media coverage and what the market in general is doing now. I make my decisions based on my position size. If you have no position, I would definitely take a bite now. If you have half a position I would buy some more too and when you have a full position or even an oversized one then you can afford to be a bit more patient and buy when it gets really attractive below 30. Selling puts with strikes below 30 is also an option when your position is already big. Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 17, 2014 Share Posted March 17, 2014 http://online.wsj.com/news/articles/SB10001424052702303563304579445180043774154?mod=WSJ_hp_LEFTTopStories&mg=reno64-wsj General Motors Recalls 1.5 Million More Vehicles Auto Maker Plans $300 Million Charge to Cover Ignition Switch Fix, New Recalls Link to comment Share on other sites More sharing options...
Palantir Posted March 17, 2014 Share Posted March 17, 2014 ^Anybody shorting this? Link to comment Share on other sites More sharing options...
Yours Truly Posted March 17, 2014 Share Posted March 17, 2014 What a coincidence that all these negative headlines and the slump in share performance coincided with the new CEO.. $300 mil seems relatively small to their cash position but the damage to the brand perception is much much larger... heck i'd never purchase a GM vehicle Link to comment Share on other sites More sharing options...
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