We recently published a list of Jim Cramer’s Latest Portfolio: Top 10 Calls Before August. Since GM ranks 6th on the list, it deserves a deeper look.
Earlier this month, Jim Cramer during his program on CNBC talked about the importance of optimism right now and explained why he sees hope for America in the future.
Cramer said that the recent political violence made things look “dark” and “grim.” The CNBC host said this election year has been a “mess, something very much in sync with the tone of the country.”
However, Cramer referred to the recent comments from the CEO of the world’s largest investment manager, and said it seems the end of the world is “not on the table.” Cramer called the executive’s comments a “breath of fresh air” and agreed with the notion that the US economy needs more growth and less business regulation. Cramer said that America has a huge deficit problem but it cannot tax its way out of this.
“But we can grow our way out of it.”
Cramer said we should understand that capitalism is a “force for good, a force for wealth generation, not just for the rich, but for everybody, as long as they invest.”
Jim Cramer urged his viewers to invest in individual stocks.
“I don’t care what you invest in, as long as you invest.”
For this article we watched the latest programs of Jim Cramer and picked 10 stocks he’s talking about. With each stock we have mentioned hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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General Motors Co (NYSE:GM)
Number of Hedge Fund Investors: 78
Jim Cramer was recently asked about Toyota during his program on CNBC. He recommended investors stay away from auto stocks for now because they have become “too dicey.”
“Prices are coming down. Let’s say no to the autos.”
However, Cramer made General Motors Co (NYSE:GM) an exception, saying the company “continues” to buy back its stock.
General Motors recently posted strong Q2 results and lifted its full-year profit outlook, thanks to rising sales of its internal combustion engine cars. General Motors Co (NYSE:GM) also upped 2024 guidance for EBIT and free cash flow amid strong demand for pick-up truck and SUV line-ups. Like other American car companies, General Motors Co (NYSE:GM) is facing headwinds in China amid intense competition. General Motors Co (NYSE:GM) EV outlook was also soft but that’s also not exclusive to the company amid a broader decline in demand.
General Motors Co (NYSE:GM) is currently trading at a forward P/E ratio of 4.6X its 2025 earnings estimate. In comparison, Ford Motor, which is facing the same business dynamics and relies on traditional car sales, is trading at a P/E of 6.9. General Motors Co (NYSE:GM) increased EBIT/FCF forecasts for FY 2024, and plans for stock buybacks. This makes it an attractive play at current levels.
Diamond Hill Large Cap Strategy stated the following regarding General Motors Company (NYSE:GM) in its first quarter 2024 investor letter:
“Other top contributors included Allstate, Caterpillar and General Motors Company (NYSE:GM). Automobile manufacturer General Motors continues capitalizing on the shift to electric vehicles (EVs) while maintaining the strength of its core gas-engine truck and SUV business. Though it has experienced some setbacks — such as needing to roll back its Cruise driverless car project — we believe the company remains well-positioned relative to secular tailwinds within the automobile business.”
Overall, General Motors Co (NYSE:GM) ranks 6th on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 10 Calls Before August. While we acknowledge the potential of General Motors Co (NYSE:GM), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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