What Does Hedge Fund Sentiment Say about General Motors Company (GM)?

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The company saw its sales in China drop for the fourth time in the last five months. More specifically, GM and its China joint ventures sold 248,815 vehicles last month, down by 4.8% year-over-year, which does not imply any prospects for the automaker. The company has lowered its forecasts on the industry-wide demand after spending massive piles of cash to build factories in China, in order to exploit the market that exceeded the one in the US back in 2009. However, China’s economic slowdown is not going to last forever, and sooner or later GM is likely to get more from its investments in China. Meanwhile, the CEO of Fiat Chrysler Automobiles N.V. (NYSE:FCAU), Sergio Marchionne, recently claimed that a merger with General Motors was a “high priority” for his company, while a potential deal could also represent one of the best strategic options for GM. The board of General Motors has already rejected a merger proposal from Fiat Chrysler earlier this year, but that does not mean the Italian-American automaker will stop from achieving its “high priority” goal. Nevertheless, despite facing harmful transitory challenges, GM has repeatedly expressed its position on the matter: the company simply prefers to operate alone.

To conclude, it seems that Greenlight Capital did not “drive in” GM at the right time, but that does not imply they make the wrong move. The company might achieve its much needed turnaround should the concerns about China’s economic slowdown diminish. In the meantime, Warren Buffett’s Berkshire Hathaway, the largest shareholder of General Motors Company (NYSE:GM) within our database, holds 41 million shares as of June 30, which could serve as another indicator that the automaker has a strong long-term outlook.

Disclosure: None

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