Transformation Plan Helps General Motors (GM) Surge Over 5%
Shares of the American multinational, General Motors Company, soared more than 5% in Monday’s trade after the carmaker released its transformation plan for the future.
As a part of the restructuring strategy, the company plans to undertake cost-cutting measures, which include curbing its vehicle line-up in the U.S. and closing U.S. and overseas plants, despite triggering layoff fears.
According to the company, this restructuring strategy is expected to help strengthen its core business, capitalize on the future of personal mobility, and drive significant cost efficiencies.
As per GM’s CEO, Mary Barra, the aforementioned moves are expected to increase GM's free cash flow from autos by $6 billion in the next two years, including cost savings worth $4.5 billion and reduced capital spending worth $1.5 billion by 2020.
With plans to allocate additional resources to electric and autonomous vehicles, the company announced the closure of five plants in 2019 as a part of its $4.5 billion cost-cutting initiative.
The company also announced layoffs of salaried and salaried contract staff to the extent of ~15%, including 25% fewer executives, to reduce overhead costs and to streamline decision-making.
GM's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for GM turned positive on May 17, 2023. 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 .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on May 26, 2023. You may want to consider a long position or call options on GM as a result. In of 76 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
GM moved above its 50-day moving average on June 02, 2023 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GM advanced for three days, in of 309 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The RSI Oscillator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
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 June 06, 2023. 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 Aroon Indicator for GM entered a downward trend on May 25, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady 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 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 consistent 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 Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued 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 (0.721) is normal, around the industry mean (9.772). P/E Ratio (5.599) is within average values for comparable stocks, (96.437). Projected Growth (PEG Ratio) (1.470) is also within normal values, averaging (5.922). GM has a moderately low Dividend Yield (0.010) as compared to the industry average of (0.040). P/S Ratio (0.324) is also within normal values, averaging (74.835).
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 89, placing this stock better than average.
Notable companies
Industry description
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High and low price notable news
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a manufacturer of cars, trucks and automobile parts
Industry MotorVehicles
GM and
Correlation & Price change
A.I.dvisor indicates that over the last year, GM has been closely correlated with F. These tickers have moved in lockstep 85% 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.
