General Motors Company (GM) is currently trading at an attractive discount in the low $30s as the company eyes significant upside potential with new product rollouts and its business in China, says Kenneth E. Lee, Managing Member of Bridgehampton Capital Management LLC.
“We think on a fundamental basis, with $10 of cash per share on the balance sheet plus significant net operating losses and having rationalized their pension obligations materially by purchasing insurance over the last year or so, that General Motors stock in the low $30s is attractive,” Lee said.
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Lee’s price target for GM is $45 to $55 a share, and he believes the current discount results from concern about the overhang from the government and a lack of sponsorship by the investment community. However, Lee sees significant upside potential with the company’s solid business in China and its new product rollout.
“We believe their products are quite good, they have an excellent business in China, and they’re rolling out new products all this year that have been getting good reviews. And that product refresh should put them in a good position to compete with other manufacturers. As a value investor that’s looking for significant upside potential, we think that there is good value here with limited downside potential,” Lee said.
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