To The Moon

My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?

"Why not both" I asked myself ?

Wouldn't there be even more upsides comparatively speaking ?

Having covered electric vehicle pioneer $Tesla Motors(TSLA)$ , I am keen to cover an incumbent internal combustion engine (ICE) turned EV maker.

This should be interesting. So, lets take a look at $General Motors(GM)$ , its Q4 2022 earnings and see if it still fits the bill.

Sidetrack: I have covered (1) an investment management company, (2) a healthcare company, (3) an entertainment company and (4) 7 financial institutions; to test out this theory.

• Visa Inc - Click here to read. Like the post ok. Tks.
• Tesla - Click here to read. Like the post ok. Tks.
• Netflix Inc - Click here  to read. Like the post ok. Tks.
• $MasterCard(MA)$ - Click here  to read. Like the post ok. Tks.
• Intel - Click here  to read. Like the post ok. Tks.
• Microsoft - Click here to read. Like the post ok. Tks.
• JP Morgan -  Click here to read. .
• Morgan Stanley -  Click here to read.

• An American multi national automotive manufacturing company
• Founded in 16 Sep 1908 (114 years old)
• The 3 founders were William C. Durant, Charles Stewart Mott and Frederic L. Smith
• Largest car maker in the US and was largest worldwide until 2008 when it was displaced by Toyota
• It has manufacturing plants in 8 countries
• Brands under GM includes - Chevrolet, Buick, GMC, and Cadillac.
• Holds interests in Chinese brands Wuling Motors, Baojun and DMAX (via joint ventures).
• Interestingly Wuling mini EV has been the "Best" seller (by volume) in China for a few years
• According to Investopedia, GM has 10 joint ventures in China alone
• GM grew to its current size through strategic acquisitions.
• It suffered major setbacks due to poor quality works and in 01 Jun 2009; it filed for Chapter 11 bankruptcy.
• With aid from the US government (due to its fallout impact to the workforce), the company undergone a massive restructure
• On 17 Nov 2010, GM IPO-ed (technically again) at the price of $33 per share
• It is also one of the component stocks in S&P 500 list of companies
• Like they say, the rest is history

In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did General Motors fare ?

Current stock price < 01 Feb 2022 stock price by -27.28% - holding its ground

• Total revenue came in at $43.11 Billion vs. $40.65 Billion expected vs $33.6 Billion (Q4 2021); thats a gain +28.27 (QoQ).
• Net income (GAAP) came in at $2.0 Billion vs $1.7 Billion (Q4 2021); thats a gain +17.65% (QoQ)
• Earnings per share (GAAP) was $1.39 vs $1.16 (Q4 2021); thats a gain +19.83% (QoQ).

GM Revenue breakdown by Country segment

• While GM is predomaintly a car maker; it has other businesses complimentary to its core car business eg. car insurance, automotives financing (GM Financial), investments in Chinese EV makers & joint ventures (GM International Ops)
• Under "Revenue Mix" - US still accounts for the bulk (82.4%) of GM's revenue
• Similarly under "Segment Revenue" - North America growth (+32%) is still second to none
• It is safe to "conclude" that GM is highly ingrained & integrated with America

General Motors - Vehicle sales by Regions

• As both an ICE & EV Seller, it is important to understand where demand is coming from.
• Broadly GM's Vehicle segments are : (1) North America (2) Asia/Pacific, Middle East & Africa and (3) South America
• Only demand from North was up ever so slightly in Q4 2022.
• While Asia/Pacific, Middle East & Africa regions saw a dip of 48,000 vehicle units from Q3 to Q4 2022.

General Motors - Other information

• GM is registering a strong cash that is "necessary" and places them in a strong position to engage in revenue generating projects or initiatives
• Just like other US mega cap companies, its "Costs & Expenses" have ballooned in Year 2022 by a whooping +26% to $40.5 Billion.  Perhaps it is timely to review and rein in the unsustainable costs expenditures.

General Motor's CEO on Q4 2022 Results:

The Chevrolet Bolt EV and Bolt EV saw record sales, which demonstrates the importance of affordable EVs in our portfolio. They were the best selling mainstream EVs in the second half of 2022, and we plan to increase production to more than 70,000 this year for global markets...... GM, CEO Mary Barra

Is General Motors Inc - Both A Good Price and Good Company ?

• Let's perform a detailed analysis.
• GM has clinched the #1 spot for US auto sales in Year 2022
• Amidst crazy price slashing by rivals EV makers eg. Tesla (Model 3 & Y), Ford (Mustang Mach-E) etc.. to maintain and hopefully attract demand, GM is not resorting to tactics that would hurt its bottom line
• In a letter to shareholders, CEO Mary Barra described 2023 as a “breakout year” for GM’s electric vehicle business, highlighting the introduction of more mainstream products like the Chevrolet Equinox EV as well as increases in production of its current models.  
• In 2023, GM has three all-new EV models due from its mass-market Chevrolet brand. Those new models include all-electric versions of the bestselling Silverado truck, and the Blazer and Equinox SUVs.
• Additionally, GM has already started production of everyone's favourite Hummer EV SUV (see below).
• On 31 Jan 2023, GM also announced that it has an equity investment of $650 Million in Lithium Americas Corp ($LAC); to develop a lithium mine in Nevada where GM is to receive exclusive access to phase one of its Lithium materials vital in EV manufacturing.
• $LAC's Thacker Pass aims to produce Lithium for up to 1 Million EVs a year; securing GM's demand
• Despite the beautiful report card (Q4 2022 earnings), GM is looking to trim its expenditure by $2 Billion (see below).  This will definitely relief its bottom line tremendously.
• There is a lot going on for General Motors in 2023.  If the traditional car maker is able to transit seamlessly from internal combustion engine to electric - the sky's the limit for this 114 years old Grand Old Dame.  Agree ?

Hummer EV SUV - in the house soon ?

• Do you agree that GM is showing strong signals that 2023 is going to be a great year for this grand dame ?
• Do you agree that GM's price will soar from H2 2023 when inflation fever blows over and the Fed halts its interest hike ?

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