By on June 2, 2008

bounce.jpgAnd so they did. GM's stock price rose today, after scribe Vito Racanelli penned an opus entitled "Buy GM." "On the long side, General Motors now seems suited mainly for one group — bold investors who hope to eventually double their money but can afford to lose it all if their wager goes awry. The good news for GM fans: Despite the misery that the car maker is experiencing and might endure for another 12 to 18 months, such a wager ultimately should pay off." Racanelli then presents a litany of GM's financial "challenges," combined with a regurgitation of GM's party line (i.e. things suck now, but won't later). Racanelli's not-quite-as-guarded-as-it-seems recantation of The General's Volt hype exemplifies the analysis. "But if the Volt succeeds — and, yes, Wagoner's stated delivery deadline won't be easy to meet — GM will steal a march on its big Japanese competitor. And, says Elizabeth Lowery, GM's vice president of environment, energy and safety policy: 'The Volt is just a piece of it.' She says that the company is launching eight hybrids this year — more than any other company — and 16 over the next four years." Sixteen? "'Enormous' is the word that Csaba Csere, editor-in-chief of Car and Driver magazine, uses to describe GM's progress. 'Their cars look good on the outside, have a luxurious sense inside and drive well,' says Csere, whose publication used to routinely blast the General's vehicles." Etc. Look for the "Racanelli" effect to disappear when GM's May sales are revealed tomorrow– with or without Rick Wagoner's new new turnaround plan. 

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17 Comments on “Barron’s on GM Stock: BUY!...”

  • avatar

    Eight hybrids, huh? That’d be more impressive if it was over more than three platforms. By that metric, you could reach sixteen badges by hybridizing the other Epsilons, Thetas and GMT900s.

    Look, I hope GM does well–my local economy is hugely dependent on them–but year after year of “The good stuff is just around the corner!” hasn’t exactly panned out, and analysts seem to forget that Toyota and Honda (never mind Ford, Nissan, VW, etc, etc) aren’t exactly sitting still, either. Toyota, particularly, would be stupid to relinquish its’ green cred to the Volt, and Toyota is not know for being stupid.

    For all it’s forward progress (and some of it’s models are very good) GM management still gives the impression of living in a vacuum, where nothing else exists except GM.

  • avatar

    bold investors who hope to eventually double their money but can afford to lose it all if their wager goes awry.

    for those those guys I would recommend Vegas or buying into a horse – theres a lot better and fun gambles than GM stock.

  • avatar

    or even Las Vegas

  • avatar

    There are, I believe, about 4000 publicly traded companies in the USA. Can anyone argue that GM is the best place to put money? Or even in the best 40? I agree the article makes some bold statements. Too bold for me; I will put my money elsewhere.

  • avatar

    There used to be a distinction between gambling and investing, or so I am told.

    I remember hearing the late Louis Rukeyser speak and he held Barron’s up for particular scorn.

    ‘The Volt is just a piece of it.’ Am I the only person who had to read that twice?

  • avatar

    I remember in one (of the few) business classes that I was forced to take (thanks liberal arts core requirements) the professor said ‘If you ever want to know what Wall St bought yesterday, check out todays paper…’ I just can’t help but think that by the time I get to read these types of articles that the actual stock buy/sell play has already been done – by the pro’s that is.

    At the end of the semester I said that he was a pretty sharp guy; why aren’t you in the engineering department? His reply “Because I want to get laid more then once every 2 years.”

    Wouldn’t you know it; he was right about that too. Damn!

  • avatar

    “Volt is just a piece of it.”

    i read it three times, but i am very tired right now.

  • avatar

    If GM went up today, 3:59pm was a good time to sell.

    Parts of that Barron’s article are too funny…

    As noted, the company intends to launch the Volt in late 2010 and is increasing its roster of conventional hybrids. In fact, contends R. Brent Byrne, CEO of Divi-Vest Advisors in Wayne, Pa., an improving “green” image is “the No. 1 reason to own GM.” Says Byrne: “No other car company is running down the green highway as fast as GM.”

    Can this Byrne character even count? Toyota sold 30K hybrids last month. GM sold 3% of rhat. Toyota’s hybrids have a great track record for reliability and offer stellar fuel economy. GM has managed to build three-ton, 20mpg hybrids that are the Ecological Antichrist. Oh, and they’re far too expensive for their target market.

    Well, if you read a little further…

    Consumers, particularly young ones, “want to get off fossil fuels,” Divi-Vest’s Byrne observes, arguing that a green image could raise GM’s revenues substantially. Byrne has been buying GM stock as the price has fallen. Divi-Vest owns about 147,000 shares.

    Oh, look. Byrne has 147K shares he’s going to want to unload.

  • avatar

    And ya’ll said the fluff-filled PR group is bad. This makes me wonder what money has to exchange under the table for Barron’s to ignore the economic, managerial, and cultural problems at GM that have to be overcome in order to return to profitability.

  • avatar

    And, says Elizabeth Lowery, GM’s vice president of environment, energy and safety policy: ‘The Volt is just a piece of it.’

    I was thinking, man, if GM’s own VP is calling the Volt “a piece of shit,” how bad must it be?


  • avatar

    A weak piece. Superficial analysis that is too rosy about the upside, while underplaying the dangers of the downside.
    Yes, GM stock is low. But it can go lower…

  • avatar

    Ford-yes. Going there myself.

    GM-Might as well stand in front of the porcelain flushing the bills away.


  • avatar

    Barron is brilliant!!! Lowest stock price averages in years and they are recommending to buy? I never would have figured out that if you had money to burn and/or throw away, GM is the place to put it. Absolutely brilliant!!!

  • avatar

    Our 401(k) funds manager probably reads Barrons, and follows their advice religiously…
    Which is why I expect to retire at the age of 90.

  • avatar
    Richard Chen

    Quadruple or nothing? There’s a brief blurb in AutoObserver about Rick planning to announce today the closure of 4 truck/SUV plants including Oshawa and Ohio.

    Businessweek has an article about a few analysts who are going double or nothing on Ford stock.

  • avatar
    John Horner

    Anyone who buys a stock based on a Barron’s article deserves what they get!

  • avatar

    Dear People,

    GM’s problems will continue until the main board members are removed. The two problems are Mr. Fisher who was still making film camera’s at Kodak while the rest of the world was in to digital. It took quite some time to get Kodak back to speed after Fisher was let go. The other is Phiser who brought Compac computer down. These two aparently domineer the other board members. The CEO at GM has done a fine job of cutting cost but does not seem to realize that you have to build a product that the public wants and needs. With billions he is losing every quarter the company will bleed to death before the CEO wakes up. Too slow with the new competitive products (high bred and fuel cell)and the public is tired of the promises. All hat but no cattle as they say.

    Hoping the rest of the board and the large investers take action as I am fearing the loss of my investment in GM.


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