General Motors: A Buy or Sell
In relation to the recent decline in oil prices, you may want to return to a transport game with the potential to earn decent income in certain promotions. One of these specific actions could be General Motors (GM). Despite the fact that, perhaps, experts hypothesize that oil is moving downward for a long period of time, my opinions tend to diverge, which can not make GM as attractive as it is. now.
By targeting the future oil products market, GM demonstrates an incredible inverse relationship in terms of comparing its points with oil prices. For example, from 2004 to early 2006, a precise picture of when oil prices rose at their highest peak, GM shares fell from almost 55 points to almost 20 points in April 2006. Although stocks rose slightly to Around $ 35 in September 2006, such growth, unfortunately, is associated with a decrease in oil reserves, since dependence on oil is more extreme than almost any other factor. Because GM has a high demand for its trucks and SUVs, large consumers of gasoline, gas sales are directly dependent on gas prices to such an extent that if oil prices increase enough, sales can restart as Consumers can change their trucks or vans. GMC dealer for more efficient cars produced by different companies. Such a transition will affect GM’s fundamentals and future leadership, and will exert enormous pressure on large institutions to sell their shares.
Now you may be reading this opinion and thinking that oil prices have fallen by almost 13% in recent weeks, which makes it an ideal buying opportunity for GM. Although logic seems reasonable, in the rational expectations of the stock market, the opposite thought will always bring more positive than negative. With such a feeling of happiness around GM shareholders, stocks will increase during a period of low oil prices. Taking this into account, stocks may increase by several percentage points in the coming weeks, leading to some capital gains. If you tend to hold your shares during this period, I would advise you to sell them in the range of 35 to 40 points if GM ever reaches a number. A safe-looking cell in the Atlantic Ocean, located to attack the Gulf of Mexico, could lead to oil prices falling back to $ 80. This is the hurricane season, conflicts in the Middle East continue and the Oil market is very unstable. Investors can ask why prices fall so much in September. The reason is that in the Middle East there has been a break in the intense conflicts and a reluctant hurricane, but any small emotion, even just the rumors, can have a big negative impact on oil and GM stocks.
The basics are another reason why GM should not be in your wallet
The support of negative margins in terms of revenues and a significant reduction in the net profit to negative values in recent years shows a correlation of how oil has affected the indicators for this company. The operating margin is terrible, as is the decrease in total assets compared to the increase in total liabilities. The company maintains a negative profit of almost 20 cents, and although dividend payments may seem favorable at 1.00, in other areas there is no reason to complement this bright spot. Therefore, given that oil is likely to have reached its minimum in terms of prices at around $ 60, it is expected that oil prices will increase in the coming weeks, since the temperature will be lower in the first week of drop. With this, there will be a possible fall of GM back in the middle to the minimum of 20 without optimism, which investors can see. If you own GM shares, I would advise you to sell at that price, and if you still want to have vehicles in your portfolio, companies like Honda and Toyota are an excellent alternative to producing cars that are suitable for higher prices.