In this article, we discuss the 5 biggest losers in Warren Buffett’s latest portfolio. If you want to see more underperforming stocks in the billionaire’s portfolio, click 10 Biggest Losers in Warren Buffett’s Latest Portfolio.
5. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 90
Year-to-Date Loss as of May 20: 42.13%
General Motors Company (NYSE:GM) is a Michigan-based automobile manufacturer that designs and sells trucks, crossovers, cars, and automobile parts and accessories in North America, the Asia Pacific, the Middle East, Africa, South America, the United States, and China. General Motors Company (NYSE:GM) stock is down 42.13% year-to-date as of May 20.
Warren Buffett is a long-term shareholder of General Motors Company (NYSE:GM), initially investing in the company back in Q1 2012. The billionaire, as of Q1 2022, held 62 billion shares of General Motors Company (NYSE:GM), worth $2.7 billion. It is one of the biggest losers in the Berkshire portfolio.
On May 11, Wells Fargo analyst Colin Langan double downgraded General Motors Company (NYSE:GM) to Underweight from Overweight, slashing the price target to $33 from $74. According to the analyst, battery electric vehicle costs have “massively risen” and raw material supply is tight, yet difficult regulations in the US possibly require higher BEV sales, the analyst told investors. In addition to that, the analyst sees headwinds from price normalization, inflationary costs, and the 2023 UAW contract negotiations.
According to Insider Monkey’s Q4 data, 90 hedge funds were bullish on General Motors Company (NYSE:GM), up from 77 funds in the preceding quarter. Harris Associates is a significant position holder in the company, with 41 million shares worth $1.79 billion.
Here is what Oakmark Global Fund has to say about General Motors Company (NYSE:GM) in its Q1 2022 investor letter:
“General Motors (NYSE:GM) was a detractor during the quarter, due to increased macro uncertainty, higher fuel prices, and concerns over rising input costs, which pressured the company in particular and the auto industry as a whole. While we are closely monitoring the potential impact of these dynamics, industry demand remains robust, driven by strong consumer balance sheets and pent-up demand after multiple years of constrained production. We also remain confident in GM’s ability to navigate a complex operating environment, which the company has consistently demonstrated over the past few years. Finally, the long-term picture remains bright. We believe GM is significantly undervalued, is well-positioned for the long-term transition to electric vehicles and has numerous needle-moving ancillary business opportunities (most notably Cruise, which is an industry leader in autonomous vehicle technology) that are underappreciated.”
