Relatively speaking, General Motors could be today the best bet for getting new stock in the auto industry: the record recalls could be over soon, sales are going up and the shares trade cheap.
That’s at least what bullish analysts think – as they start signaling that the company has reached the highest quality for its vehicles in decades, the recalls are close to fading away into corporate memory and the company’s operating margins continue to grow. General Motors shares have dropped 21% so far this year – when the company has posted record (not for the automaker itself, but for the whole industry) recalls – and they’re actually trading at 7.7 times estimated earnings for the next four quarters. That means the biggest US carmaker is now around 23% cheaper than the world’s largest automaker – Toyota – and 55% lower below the Standard & Poor’s 500 Index. Of course, the incredible numbers associated with the recall fallout is dragging the stock down and threatens to completely overshadow Mary Barra’s progress since she became CEO in January.
On the other hand, the No. 1 US automaker and the third largest auto company in the world has seen its home sales the best since 2007 and most of the analysts predict the company would rise to record global sales in 2015.