Is General Motors Company (GM) a Buy?
Competitive victories over some of its most important rivals followed, and General Motors looks a lot healthier financially than it has throughout much of its history. The auto industry is notoriously cyclical, and after several years of record sales, some wonder whether General Motors is due for a cooldown. Yet that negative sentiment has been around for a while now without industry conditions deteriorating to nearly the extent that some had expected, and a closer look is necessary to see whether GM is a good buy for investors right now. Overall, U.S. sales volumes fell 1.3% during 2017 from the previous year, but most of those declines came from planned contractions in sales to rental-car fleets, which have historically had relatively weak profit margin associated with them. Although demand for its sedan vehicles fell sharply, GM was able to drive sales of its crossover sport-utility vehicles to impressive gains and mostly offset weakness elsewhere. General Motors still has to deal with the capital requirements of the auto industry, and that requires plenty of reinvestment into its business. Even after coming out of bankruptcy, GM wasn't able to get rid of debt entirely, and the automaker has seen its long-term debt levels rise gradually in recent years.