General Motors Company (GM) and Ford Motor Company (F) investors are once again left scratching their heads wondering just what it’s going to take for investors to buy auto stocks. Both companies delivered revenue beats in the second quarter and GM convincingly beat consensus EPS estimates as well.
How did the market reward the stocks?
Since GM reported on July 21, GM stock is down 5.5% and Ford stock is down 13%. And this isn’t simply a case of profit taking because there are no profits to take.
In the past three years, Ford and GM are down 31.5% and 18.9% respectively during one of the strongest bull markets and strongest auto markets in history.
In fact, even though the two auto stocks have been tanking, GM’s revenue climbed 2.5% and its net income spiked 126.3% in the past three years. Ford has a similar story to tell: revenue up 7.25% and earnings up 58.7%. Both Ford stock and GM stock now trade at forward price-to-earnings ratios under 7.
What in the world is the market thinking? Here are three reasons investors hate the auto stocks.
Investors Are Terrified of Tesla
Tesla Motors Inc (TSLA) is…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
