Every serious investor will have a story of lost opportunity that they continue to lament over. Of course, opportunities don’t show up every second day, more so in the stock markets. The idea is to identify one before it vanishes. Perhaps, General Motors (GM) is one such value stock that you can’t ignore at the moment.
The GM stock has fallen about 23% this year and is currently trading at six times lower than its forward earnings. This makes the stock super cheap, especially when compared to its rivals. But what makes GM more attractive is its upside potential in the self-driving technology market.
The autonomous vehicle market is expected to grow to $7 trillion by 2030. And GM is now at a pole position to capture the market by officially becoming the first company to mass produce a fully-autonomous vehicle. In June this year, GM manufactured 130 self-driving Chevrolet Bolt EVs and started testing them on roads, beating rivals including Tesla (TSLA), Ford (F), Google’s (GOOGL) Waymo and other smaller competitors.
GM had identified a shift of customer preference towards autonomous vehicles pretty early, acquiring Cruise Automation, a start-up that works on self-driving technology by 2016. Some reports suggest that GM may now cruise into the lucrative ride-hailing service, currently dominated by Uber and Lyft, by 2019.
General Motors is not short of funding either. Closely following the heels of $2.25 billion investment by SoftBank Group, Japanese automobile giant Honda Motor Company has pledged $2.75 billion in the company over the next one year. Honda has separately announced a $750 million towards Cruise Automation.
The Detroit-based carmaker has a PE ratio of 5.59 and PEG ratio of 0.74, clearly indicating that the stock is undervalued. Let not the opportunity slip between your fingers this time around.
DISCLAIMER: The article does not necessarily imply the views of AlphaStreet, and contains opinions of the author alone.
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