General Motors will experience tailwinds in the near future
Einhorn is also bullish about General Motors Company (NYSE:GM). He commented that the company’s losses in Europe, its biggest problem, seem to have reached a trough. Simultaneously, the automobile industry continues to strengthen.
In the second quarter of 2013, General Motors Company (NYSE:GM) generated around $39.1 billion in revenue, with around 2.5 million in global deliveries. Its global market share stays around 11.5%. Its EPS came in at $0.75 per share, including a net loss from special items of around $0.09 per share. Its adjusted EBIT (earnings before interest and taxes) experienced 9.5% growth from $2.1 billion in the second quarter of last year to $2.3 billion this year, while the adjusted automotive free cash flow increased by nearly 53% to $2.6 billion.
In the second half of 2013, General Motors Company (NYSE:GM) will focus its efforts on new vehicle launch executions, with continuing cost and complexity reductions. It also expects to give intense concentration to quality and customer experience. At $36.70 per share, General Motors is worth $50.4 billion in market cap. The market values General Motors at only 5.6 times its trailing EBITDA. With a strengthening North American automobile business and the recovery of the European business, I believed General Motors would deliver decent gains for shareholders in the long run.
My Foolish take
Apple, Samsung and General Motors all have global market leading positions in their fields. Interestingly, all of them are currently valued quite cheaply in the market. I like Apple with its decent dividend yield and potential total high yield including the $100 billion cash-return plan. I also like General Motors because of its low valuation, the coming growth for the North American business and the potential recovery of the European business.
Anh HOANG owns shares of Apples and General Motors’ Series B Warrants. The Motley Fool recommends Apple and General Motors. The Motley Fool owns shares of Apple.
The article David Einhorn Is Still Bullish About These 2 Stocks originally appeared on Fool.com and is written by Anh HOANG.
Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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