TARP Report Reveals Gov’t & GM Screwed Taxpayers More than Previously Thought

Bloomberg reported today that the U.S. government lost an upwardly-revised total of $11.2 billion dollars in its bailout of General Motors Co. (GM, $34.48).  The previous estimated loss was $10.5 billion.

And on that happy note, I would like to remind investors that the stock market is based on capitalism, which means free markets.  When the government gets in bed with corporations and props up their stock, that’s no longer capitalism.  That’s socialism or fascism.  (Read more about GM’s irresponsible behavior and government bailout by scrolling to my last article in Stocks in the News — week of January 13, 2014.)

When investors buy stocks like GM, delightfully exclaiming, “Oooo, looky!  Low debt levels!  Growing earnings!”, what they are failing to see is that the company got to that sweet place because their Sugar Daddy at the U.S. Treasury opened its wallet for GM.  And now the wallet is closed.  (continued…)

All eight 2013 & 2012 Goodfellow LLC stock portfolios

dramatically outperformed both the S&P 500 and the Dow!

View our outstanding 2013 and 2012 stock portfolio results.  

Can GM maintain a good balance sheet position and market leadership without Sugar Daddy holding its hand?  That remains to be seen.  But in light of the current recall scandals, I would venture to say that GM is far from responsible and prudent in its management of the company, its products, and its customer-base.  (Read more about the recalls in my recent article GM Issues New Recalls Relating to Axles and Transmission Lines.)

GM by the Numbers

The earnings outlook for GM has changed drastically since my March 29 report.  Wall Street now expects GM’s earnings per share (EPS) to fall 2%in 2014, followed by gains of 54% and 5% in 2015 & ’16 (Dec. year-end).

The 2014 price-earnings ratio (PE) is 11.1%, within a 2010-2013 range of 4-18; and the 2013 long-term debt ratio is 12%.

The current dividend yield is hefty at 3.4%.  (continued…)

It only costs $25 for a one-week trial subscription to Goodfellow LLC.

All stocks chosen via strict fundamental and technical criteria.

What to do with your GM shares?

All of my advice about the GM stock chart from March 29 remains intact.  If I owned the stock, I’d use a stop-loss order to protect my capital from bad news relating to recalls and government investigations.  And I would sell when it rises to $37.25.

Goodfellow LLC Rating: Volatile, Public.  (05-01-14)

GM Chart

GM data by YCharts

* * * * *

Send questions and comments to research@GoodfellowLLC.com.

Happy investing!

Crista Huff

President

Goodfellow LLC

* * * *

Investment Disclaimer Release of Liability: Through use of this website viewing or using you agree to hold www.GoodfellowLLC.com and its employees harmless and to completely release www.GoodfellowLLC.com and its employees from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. Goodfellow LLC and its employees are not paid by third parties to promote nor disparage any investment.

Recommendations are based on hypothetical situations of what we would do, not advice on what you should do. Neither Goodfellow LLC nor its employees are licensed investment advisors, tax advisors, nor attorneys. Consult with a licensed investment advisor and a tax advisor to determine the suitability of any investment.

The information provided herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. When information is provided herein from third parties — such as financial news outlets, financial websites, investment firms, or any other source of financial information – the reliability or completeness of such financial information cannot be guaranteed. The information contained on this website is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities.

This is not an offer or solicitation for any particular trading strategy, or confirmation of any transaction. Statements made on the website are based on the authors’ opinions and based on information available at the time this page was published. The creators are not liable for any errors, omissions or misstatements. Any performance data quoted represents past performance and past performance is not a guarantee of future results.

Investments always have a degree of risk, including the potential risk of the loss of the investor’s entire principal. There is no guarantee against any loss.

* * * *
Goodfellow LLC is a subscription-only stock market website. We strive to identify financially healthy companies in which traders and investors can buy shares and earn dividends and capital gains. See disclaimer for the risks associated with investing in the stock market. See your tax advisor for the tax consequences of investing. See your estate planning attorney to clarify beneficiary and inheritance issues associated with your assets.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *