February 3, 2015

VALUATION WATCH: Overvalued stocks now make up 24.13% of our stocks assigned a valuation and 6.83% of those equities are calculated to be overvalued by 20% or more. Zero sectors are calculated to be overvalued.

Life In The Fast Lane

GM Results Continue Good News For US Automakers

General Motors Company (GM) is engaged in the designing, manufacturing and retailing of vehicles globally including passenger cars, crossover vehicles, and light trucks, sport utility vehicles, vans and other vehicles. Its business is organized into three geographically-based segments- General Motors North America (GMNA), General Motors International Operations (GMIO) and General Motors Europe (GME). General Motors Company is headquartered in Detroit, Michigan, the United States of America.

We've seen bad results from some major companies over the past two weeks, but for this bulletin we finally have some good news. Today, GM announced great earnings. The company posted record results with $6.3 billion in net income for Q4 2015, up from $1.1 billion a year earlier. GM's 2015 profit was more than triple that of 2014--$9.7 billion vs $2.8 billion last year. Based on its strong operating performance in 2015 and consistent with the outlook provided in January, the company reaffirmed its expectation that its EPS-adjusted will be between $5.25 and $5.75 in 2016.

Chairman and CEO Mary BarraIt noted that 2015 "was a strong year on many fronts, capped with record sales and earnings, and a substantial return of capital to our shareholders." She went on to say that GM continues to work on its "core business, which is laying the foundation for the company to lead in the transformation of personal mobility. We believe the opportunities this will create in connectivity, autonomous, car-sharing and electrification will set the stage for driving value for our owners for years to come.”

While this is a great report for GM, we see a paradox here for investors. While GM and other US manufacturers have been doing great over the past few years thanks to pent-up demand leftover from the Bush recession of 2008 as well as falling oil prices, shares have declined of late. Today, they declined @4% despite teh good earnings report. That is because falling oil prices may bolster the sale of more profitable vehicles here at home, but damage sales in increasingly important overseas markets such as China.

Once again questions about the global growth picture are hurting a firm that does business in emerging markets. And, a strong dollar can hurt GM in those markets as well. Some analysts believe that this strong growth for US car manufacturers may have peaked, and thus we see a decline in share prices despite the good earnings news.

ValuEngine continues its BUY recommendation on GENERAL MOTORS for 2016-02-02. Based on the information we have gathered and our resulting research, we feel that GENERAL MOTORS has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and P/E Ratio. .

You can download a free copy of detailed report on GM from the link below.

ValuEngine Forecast
	Target Price*	Expected Return
1-Month	29.96	1.05%
3-Month	30.57	3.09%
6-Month	30.96	4.41%
1-Year	33.39	12.62%
2-Year	32.36	9.13%
3-Year	33.19	11.93%

Valuation & Rankings
Valuation	14.46% undervalued	Valuation Rank(?)	50
1-M Forecast Return	1.05%	1-M Forecast Return Rank	98
12-M Return	-10.45%	Momentum Rank(?)	58
Sharpe Ratio	-0.14	Sharpe Ratio Rank(?)	50
5-Y Avg Annual Return	-4.16%	5-Y Avg Annual Rtn Rank	50
Volatility	29.97%	Volatility Rank(?)	57
Expected EPS Growth	14.64%	EPS Growth Rank(?)	50
Market Cap (billions)	47.64	Size Rank	99
Trailing P/E Ratio	6.02	Trailing P/E Rank(?)	96
Forward P/E Ratio	5.25	Forward P/E Ratio Rank	94
PEG Ratio	0.41	PEG Ratio Rank	61
Price/Sales	0.31	Price/Sales Rank(?)	86
Market/Book	1.64	Market/Book Rank(?)	52
Beta	1.68	Beta Rank	17
Alpha	-0.05	Alpha Rank	52

DOWNLOAD A FREE SAMPLE OF OUR GENERAL MOTORS (GM) REPORT BY CLICKING HERE

ValuEngine Market Overview

ValuEngine Sector Overview