Despite "Buy" Ratings, Wall Street Frustrated By GM

by Derek Kreindler

Published: October 18th, 2012

despite buy ratings wall street frustrated by gm

GM’s stock is still considered a “Buy” in the eyes of much of Wall Street, but analysts say that more changes are needed to accelerate the pace of growth in the post-Bailout era.

Ben Klayman of Reuters spoke with a number of analysts at major investment firms had a number of suggestions for GM; trim middle management, hire new employees from outside sources and rid itself of the insular, rigid culture that plagued the old GM. Europe remains a focal point for criticism, with the PSA-GM alliance, and its write-down by GM, being a point of criticism. And let’s not forget Opel either. Klayman reports that letting go of Opel would do a lot for its share price

Last month, Morgan Stanley analyst Adam Jonas, who rates GM’s stock “overweight,” suggested the company should divest its Opel business in Europe, which he said would boost GM’s shares more than 50 percent.

The Treasury’s exit is cited as a pre-condition for some investors, who won’t purchase GM stock until the government is no longer involved.

#Finance #GeneralMotors #GM #Opel #PSA

Derek Kreindler

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13 of 36 comments

2drsedanman on Oct 18, 2012

"who won’t purchase GM stock until the government is no longer involved." Same reason I wouldn't purchase anything they make.

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Buickman on Oct 18, 2012

Return to Greatness and Extra Mile would increase sales substantially, make the taxpayers whole, and securely fund the VEBA but GM management refuses to accept advice from a "salesman". shame really.

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- Sunridge place on Oct 18, 2012
  
  AARP Discounts! Let GM Employees lease a new car every month! If a rebate changes in 30 days after you buy a car, we'll give you a refund! That will solve everything! Where's that 15% market share you predicted by years end?
  
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- Buickman on Oct 19, 2012
  
  @sunridge place does it make more sense to offer up to $2,000 to competitive leaseholders? employee leases are good business but not every month, you know that. 30 day guarantee would be extremely beneficial, ask any dealer. no plan as all the answers, it's a matter of direction and leadership (see Jim Leyland) 15 was a monthly call not YTD, btw, hope I'm wrong. what else you got? Buickman
  
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- Sunridge place on Oct 19, 2012
  
  @sunridge place Yes..it does make more sense to have cash available to dealers to get people out of competitive leases instead of floating cash to AARP members. Selling Buicks in the past might make you think differently. Only when dumbass dealers tell people about the competitive lease offers does it cause problems. GM sure as hell doesn't advertise it...its your dealer buddies who run an ad with a monthly payment and an ** with the rules in the fine print and piss people off. As far as the rebates after the sale, you're too used to selling to GM Employees and their family members who bitch and whine about every dollar when they buy a car and then cry like babies if the cash goes up $500 a few weeks later. Cruze/Camaro/Sonic/Equinox/Terrain etc all sell quite well without customer rebates...but god forbid the EVA goes up a few bucks the next month and its an employee. You know damn well the rebates are much lower and more consistent now than in the past. Sixty day programs and they really don't change dramatically cycle to cycle. You are arguing points from 4+ years ago once again. Hey, if GM follows the Jim Leyland way, they would underachieve most of the year and barely scrape by, then get hot in December and increase market share!
  
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- Buickman on Oct 19, 2012
  
  @sunridge place you sir are confusing the issues even when you're not off base. "dumbass" dealers is a dumbass statement, franchisees are our partners and it's our responsibility to provide effective leadership rather than invalid and derogatory accusations. perhaps you're not familiar with "fast start" bonuses, SFE, EBE, in addition to other weekly, if not daily, changes. as announced years ago, only the first twenty steps of RTG were revealed, and only for openers. if you're gonna criticize, please pay attention. criticizing Leyland at this juncture certainly doesn't add validity to your argument. "God" should be capitalized IMO.
  
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- Sunridge place on Oct 19, 2012
  
  @sunridge place You brought Leyland up as an example...I was kind of joking if you didn't get the comparison to the Tigers performance this year and GM's. You lecturing someone about name-calling is rather amusing. Please give us a recent example of a daily or weekly change on a dealership bonus program.
  
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- Buickman on Oct 19, 2012
  
  @sunridge place yes I have been guilty of accusations and nicknames from Red Ink Rick and his Board of Bystanders on down but you've never seen me target the dealers. sorry I missed your attempt at humor, my bad. daily or recent change? how about the announcement that aunts and uncles, nieces and nephews qualify for GMS that was rescinded the next day? beyond that it's still the same "Hurry before it's over" distress merchandising that has significantly contributed to rendering our products undesirable.
  
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- Sunridge place on Oct 19, 2012
  
  @sunridge place I have no idea if this is true...but somehow GM announced that uncles, aunts, nephews etc were eligible for GMS...then it was changed the next day and THAT is hurting sales for GM? Come on. You used a lot of fancy names about programs that change every day or every week recently and that is what you reference? Please...tell us about recent programs that lead to the distress sales. The past? 72 hour sales around the 4th of July that lasted 9 days? Yep. Bonus cash certificates awarded on the basis of the amount of aged inventory? Yep. As you know, there was more crap like that back in the day and you had a post on your website that was one of the funniest things I've read around those programs. I don't see the 'distress' sales now. Now? An incentive program the gives bonuses to dealerships based upon volume? Uhh...that's so wrong? How shocking....a company paying bonuses for hitting or exceeding a sales target? On my gosh...lets not do that! You seemed to indicate that those programs were being jerked around and you give a random example about extended family members of GM somehow being included and then excluded from GMS as your best recent example?
  
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- Buickman on Oct 20, 2012
  
  @sunridge place I'll grant you that the incentives don't change as rapidly as they have over the past and give credit to Mark Reuss for stabilizing the announcements. still, we have returned to the holiday bonuses and end of the month pushes that have conditioned customers to wait and caused hesitation in their decision making. that's the reason the 30 day guarantee makes so much sense and virtually everyone agrees it would help sales. usually we find ourselves slow as the month begins, somewhat busier mid month, then crazy busy EOM. were we able to spread the volume more evenly across time the customers would get better service, satisfaction would rise, and salespeople would be able to perform their job functions smoother and more effectively. most importantly though, buyers would feel confident in doing business now and our image would improve. this is just one area where better marketing would benefit GM, there are many, many more... btw, I welcome your criticisms. it's been the input from literally hundreds of knowledgable folks like you that have made Return to Greatness such a strong plan.
  
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Dimwit on Oct 18, 2012

Does anyone know what GM's market share is? It was a big deal when it sank to 18%, what is it now? The thing is, GM is a market darling compared to Ford. Wall St. abhors Ford because of the tiered system of shares. Anything that the St. pontificates about should be a warning to run.

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- Sunridge place on Oct 18, 2012
  
  18.1% YTD thru Sept http://online.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE
  
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Hubcap on Oct 19, 2012

"Despite “Buy” Ratings, Wall Street Frustrated By GM" I'd wager most Americans and for that matter the world is frustrated with Wall Street shenanigans and the proclivity of Congress and the Executive to kneel down before their pay masters and accept whatever happens to slide past their lips and down their throats.

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