Barron's on GM Stock: BUY!

Robert Farago
by Robert Farago
barrons on gm stock buy

And 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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4 of 17 comments
  • Shaker Shaker on Jun 03, 2008

    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.

  • Richard Chen Richard Chen on Jun 03, 2008

    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.

  • John Horner John Horner on Jun 03, 2008

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

  • Magna1 Magna1 on Jul 06, 2008

    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. magna1