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PlanMaestro

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Went a GMC dealership today to check out the 2014.  Like the truck and want to put it on the shopping list but after a discussion with the sales guy buying a new vehicle maybe put last on the to do list.

 

The new pickups are electronically programmed.  I wouldn't even be able to change out a battery on it myself.  A new battery would also have to be programmed into the computer alot like audi and Mercedes.  It took a little bit for him to finally admit this but it has me wondering what else I'm not able to do regarding maintenance?  Are the most simple task such as a new batter and spark plugs going to cost an arm and a leg to be replaced bc no one else is able to do it bc they need to be programmed?

 

  I'll admit that most people will probably not ask questions like this when shopping (and car dealers are not going to come out and really explain this)  I normally expect a vehicle to last 12 years and look past the warranty when making a vehicle decision.

 

As much as I hear about people bitching at work about the cost to repair their Mercedes the new line of GM pickups has me scratching my head.

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Gm impala one of the top sedan rank by consumer report

 

http://finance.yahoo.com/news/impala-tops-sedans-consumer-reports-102156094.html

 

I don't see all the hoopla that tesla received with the Gm impala

 

Only 2 car ever received higher score and impala is a 27k car

 

Lets hope it his translate to more sales and profit

 

"It really doesn't fall down in any area, and it does a lot of things really well," Fisher said of the 2014 version. "The car rides better than a Lexus ES. It's quieter than many luxury cars. It accelerates and brakes better than, say a Volkswagen GTI. It's extremely roomy."

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http://www.bloomberg.com/news/2013-07-25/gm-beats-profit-estimates-ahead-of-new-model-wave.html

 

GM Beats Profit Estimates Ahead of New Model Wave

 

 

 

Profit excluding one-time items was 84 cents a share, GM said, exceeding the 77-cent average of 13 estimates compiled by Bloomberg. That compares with 90 cents a share a year earlier. GM rose 0.6 percent to $37.37 at 9:46 a.m. New York time. The shares earlier touched $37.71, the highest intraday price since January 2011.

 

...

GM’s North American operations reported adjusted earnings before interest and taxes that rose 4.5 percent to $1.98 billion, the automaker said today in a statement. That exceeded the $1.73 billion average of three analysts’ estimates. Companywide net income fell 23 percent to $1.41 billion in the second quarter. The company earned $2.59 billion during the first six months.

 

...

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txlaw, i know the warrants are kicking ass

 

 

i have been trying to figure out at what price i'll start to unload some (have not sold a share yet). i can see GM trading over $45, that would mean another $10 or so to the B warrants.

 

I plan on holding my current stake in the warrants for the long run.  I may even add at some point, but not right now, as I want to deploy capital into other opportunities.

 

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Cadillac CTS just won Motor Trend Car of the Year:

http://www.freep.com/article/20131107/BUSINESS01/311070088/GM-Cadillac-CTS-Motor-Trend-Car-of-the-Year-2014

 

I'm glad that we bailed these guys out.  The resurgence of GM and other American car manufacturers, including new ones like Tesla, has generated how much wealth for Americans -- despite these nominal $10 billion loss figures? 

 

And now we seem to be in a new golden age of cars.  Loving it -- although we definitely need to work a bit more on public transport in the US.

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folks was wondering if anyone has given any thought to when/if GM issues dividend do you plan to exercise the warrants? i can't recall if the strike prices adjust base on dividend. i need to look into this again.

 

 

this is from their websites faq"

 

" Strike prices may change due to certain events, such as a stock dividend or stock split.  There are no restrictions on shares of common stock post exercise."

 

hy

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Some nice excerpts:

 

"GM already trades at a valuation that’s cheaper than 97 percent of its peers, including Ford Motor Co. (F), according to data compiled by Bloomberg. Analysts project the company will generate $5.4 billion in free cash flow in 2014, double last year’s figure."

 

"GM’s $42.3 billion enterprise value as of yesterday was equal to 3.1 times analysts’ average estimate for this year’s earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. That multiple trails all but one automaker larger than $5 billion, a group which fetches a median of 9 times Ebitda, the data show."

 

Let's unpack of this for fun...

 

The article implies that analysts expect around $13.65 billion of EBITDA for 2013. On a projected maintenance capital expenditure of $8 billion a year and about $500 million of interest expense, we should expect a little more than $5 billion of free cash flow. (Nice to have a tax shield.) Compare this to the market capitalization of GM @ $52 billion, and you're getting roughly 10.4x FCF -- compared to the S&P 500 ratio of about 18.85x. (Comparable companies are trading at around 13.4x) -- so likely cheap.

 

Interestingly, the $13.65 billion of EBITDA implies an 8.8% EBITDA margin on estimates of $155 billion in revenue (which I personally think GM will beat). The consensus estimate for revenue in 2014 is about $165 billion, which then would imply a $14.52 billion EBITDA for 2014.  Apply the same calculation of capital expenditures and interest rates above, and you get a little over $6 billion in fee cash flow -- again likely cheap compared to the current market capitalization.

 

 

folks was wondering if anyone has given any thought to when/if GM issues dividend do you plan to exercise the warrants? i can't recall if the strike prices adjust base on dividend. i need to look into this again.

 

 

this is from their websites faq"

 

" Strike prices may change due to certain events, such as a stock dividend or stock split.  There are no restrictions on shares of common stock post exercise."

 

hy

 

 

If I remember correctly, there's no adjustment for "ordinary cash dividends"...

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http://www.bloomberg.com/news/2013-12-04/gm-said-to-plan-sale-of-9-9-ally-financial-stake-held-in-trust.html

 

General Motors Said to Plan Sale of Ally Financial Stake

 

 

The No. 1 U.S. auto maker by sales plans to sell its stake through a private placement valued at about $900 million, one of the people said. A sale could be announced within a week. Identity of the buyer or buyers couldn't immediately be learned.
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Even after this pension adjustment (whether it's reasonable or not can be argued), seems Fiat is as cheap as GM, if not cheaper, according to the data presented in this report; Arguably Fiat will have more upside due to leverage

 

near term GM 's government catalyst is more predictable, while Fiat 's merge catalyst is less predictable

 

 

Thanks for pointing that out guys... Seems to make sense

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