The Simplest Graph Shows Exactly Why GM Is a Big Buy -- but There's 1 Huge Drawback

Detroit automakers such as General Motors (NYSE: GM), Ford Motor Company (NYSE: F), and Stellantis (NYSE: STLA) (if you still count the latter) have long been plagued by low valuations. While Wall Street is slowly changing its perception of these automakers as investments, thanks to a more intriguing and lucrative future centered on driverless vehicle technology and increasing software monetization, automakers' valuations seldom rise above a modest 10 times price-to-earnings ratio.Let's cover what holds valuations down and, with one simple graph, show how GM has finally broken free of this confinement.In the past, investors shunned automakers as long-term investments due to many negative factors. Those include the view that automakers were highly cyclical, leaving them exposed to boom-and-bust economic volatility; ballooning legacy costs such as pension and healthcare obligations; capital-intensive operations that left them with thin margins; and the "dinosaur" narrative, in which management was slow to adapt and sometimes arrogant.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool