Warren Buffett is a value investor. He is considered one of the greatest investors of our time. His company’s huge investment in GM is a testament that the automaker is on the right track to achieving long-term profitability.
The Mottley Fool rated General Motors as the most affordable stock on its list.
GM closed the third quarter with nearly $38 billion in liquidity and almost $10 billion in operating cash flow from its auto business.
During the COVID-19 crisis, General Motors’ vow to maintain high liquidity has buoyed hopes for the company to mitigate losses, pay down debt, and prepare for the future.
General Motors CEO Mary Barra and her team recently announced that they will introduce 30 new electric vehicles by 2025 at the 2021 Consumer Electronics Show on Tuesday. This development has driven the company’s stock rally.
The prospect of GM getting a slice of Tesla’s market share has likely prompted investors to revalue the company, benefiting Buffett in the process.
On Thursday, Argus analyst Bill Selesky raised his stock rating on GM from hold to buy based on the fact that the company is expanding into the electric and autonomous vehicles market. He also noted that the automaker is benefiting from “high margins” in North America and it has a “solid cash flow and a strong balance sheet.”
