Tesla's meteoric rise over the last couple of years has disconnected the company's share price from its fundamental value, in my view. Consider that Tesla is still a barely profitable company whose market capitalization exceeds all other major US, European, and Japanese auto companies combined. What's more, Tesla's sales are just 1/50th of the other major automakers.
Enter General Motors (GM), which announced late last week they were setting a goal of 2035 for phasing out gasoline- and diesel-powered vehicles, which is a huge deal for GM -- vehicles that run on fossil fuels make up approximately 98% of GM's total sales. The announcement is a monumental shift in the company's long-term strategy, and sets it up to compete with Tesla in the decades to come.
The available market share for EV sales is still very much up for grabs -- about 2.2 million EVs were sold globally in 2020, which made up a mere 3% of overall auto sales. Imagine a time when 50% of all auto sales are EVs! Who will be selling the most vehicles then?
GM's decision comes at a time when the market is pushing corporations towards climate-friendly policies and emissions-conscious production. GM took a big step last week in saying it wants to be a long-term player.
So which stock does Tickeron's A.I. like the most now? Below, A.I.dvisor runs analytics on both stocks side by side, with actionable trade ideas.
The 50-day moving average for GM moved above the 200-day moving average on January 29, 2024. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
The Momentum Indicator moved above the 0 level on February 20, 2024. You may want to consider a long position or call options on GM as a result. In of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for GM just turned positive on February 26, 2024. Looking at past instances where GM's MACD turned positive, the stock continued to rise in of 41 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GM advanced for three days, in of 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 243 cases where GM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The RSI Indicator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
GM broke above its upper Bollinger Band on February 27, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. GM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.736) is normal, around the industry mean (6.077). P/E Ratio (5.598) is within average values for comparable stocks, (18.348). Projected Growth (PEG Ratio) (0.764) is also within normal values, averaging (5.476). GM has a moderately low Dividend Yield (0.009) as compared to the industry average of (0.043). P/S Ratio (0.326) is also within normal values, averaging (37.052).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to slightly better than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. GM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of cars, trucks and automobile parts
A.I.dvisor indicates that over the last year, GM has been closely correlated with F. These tickers have moved in lockstep 78% of the time. This A.I.-generated data suggests there is a high statistical probability that if GM jumps, then F could also see price increases.