GM - General Motors

GM's Barra Says Autonomous Vehicles 'Quite Astonishing' and a new daily low at $33.95 was just reached for GM.

 

Short term $48 in the house. Mid. Term $52 is coming. 8 X PE / hurricane effect. Used car price Up. Best on the auto market.

 

GM is setting up for a potential double bottom base, if that happens look out and above! Might rally to 45+ in a jiffy!

 

Last week I got some of this, fundamentals are not superb, however I felt that current level is a low-risk bet.
Atached (a bit old) weekly chart.

 

I've generally looked at GM and Ford as burning ships but the opposed piston diesel I mentioned in the Ford thread could extend the relevance of the ICE platforms for another decade.

Opposed piston diesel will bring much needed emission and economy improvements to trucks and vans. This space is going to be difficult to electrify because of the scale of truck batteries and charging needs. Not every loading dock is going to have a 1 megawatt charger and I don't see it coming in the next 10 years.

Achates Power has mentioned working with a major, American, manufacturer so I speculate 80% GM, 20% Ford. Whomever gets this technology will retain relevance on the 10 year time frame.

I may invest in the company that gets this technology.

Mazda's compression ignition technology is a great thing and it will extend ICE relevance in the car space but I don't think it will be relevant for as long and other manufacturers would do better to migrate to electric, rather than improve their ICE platforms. Mazda is in great shape, though.

 

I would short the strikers.

 

I've never understood why a strike causes such heavy swings to the market cap of a company.

Labor squabbles are not all that relevant, to the long term health of a company. The only caveats are extremely long strikes or a particularly bad contract. Other than that, the company will be in the same place two years from now as it would have been if there had been no strike.

For someone looking to get into GM, this could be a nice buy opportunity.

Once the workers are building cars again and a quarter or two have passed, the stock will be priced exactly how it was prior to the labor friction. Enjoy the discount.

 

As far as I know, Achates has not announced who they are working with to produce a production OPOC engine. Everyone seems to be betting on GM, myself included.

Here is an 18 month old article.

http://gmauthority.com/blog/2018/01...to-use-2-7l-opposed-piston-engine-get-37-mpg/

If GM is working with Achates, this could be an amazing buy opportunity.

Someone will have to build a ton of OPOC engines for the military (who has funded the development of this new technology) and I can't think of a company better suited to do this than GM.

 

It's interesting to see the trading perspective on this situation.

GM is down about the same as Ford, in the last six months. When I look at the graphs, I think GM is doing fine.

 

I agree with @T0rm3nted about the short term trend, but I also see it in a longer-term sideways trading range where it has frequently poked above and below the boxed range. Probably start selling puts at 30 strike if this thing drops below, say, 33.