Friday, January 3, 2014

Sliding Auto Sales Kill the General Motors Rally

Remember when everyone loved General Motors (GM) and were disappointed with Ford (F)? That’s so 2013.

Here’s a chart of showing the price of General Motors’ stock divided by Ford’s during the past year.

 

But all positivity around General Motors has vanished today following its announcement of last month’s auto sales. General Motors reported that December sales slide 6.3%, well below the consensus estimate for a 1.5% increase. Ford missed forecasts too–it reported a gain of 1.7%, below the consensus of a 4.3% increase–but at least it was a gain.

RBC Capital Markets’ Joe Spak says investors should use weakness in General Motors to buy its shares, but they seem a lot more comfortable with Ford. General Motors’ shares have dropped 3.2% to $39.65 at 12:29 p.m.–while Ford has gained 0.6% to $15.53. Toyota Motor (TM) has dropped 0.5% to $120.05 and Honda Motor (HMC) is off 0.3% at $40.457.

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