Ford Motor Company (F) Vs. General Motors Company (GM): Does Goldman Sachs Have It All Wrong?

As far as the valuation of the two companies is concerned Ford is currently trading at a higher twelve month trailing earnings multiple of 19.83 as compared to GM’s 16.12, owing to its higher PEG ratio of 1.15 as compared to 0.88 for GM. However, Ford could be a riskier investment in the future, in the event that rates start rising since it is more leveraged than GM. While General Motors Company (NYSE:GM) missed both the earnings and revenue estimates for the first quarter, Ford Motor Company (NYSE:F) managed to post revenues that were in line with the expectations but fell short on the earnings front.

Although during the first quarter the hedge fund interest in the companies, among those that we track, fell, Ford Motor Company (NYSE:F) faced a sharper decline as a total of 33 funds disclosed long positions with an aggregate value of $832.07 million at the end of March, as compared to 45 funds with $1.03 billion at the end of the previous quarter. Richard S. Pzena‘s Pzena Investment Management was the largest stockholder among these funds with 17.64 million shares valued at $284.66 million. On the other hand, General Motors Company (NYSE:GM)’s has been more popular as  the number of funds with long positions declined to 103 from 107, while the aggregate value of their investments went up to $6.74 billion from $6.07 billion. The legendary investor, Warren Buffett‘s Berkshire Hathaway is the largest shareholder of General Motors Company (NYSE:GM) among these, owning about 41 million shares valued at $1.54 billion.

Neither feels like a particularly great investment at this point, despite Goldman’s support for Ford.

Winner: Draw

Disclosure: None