If you’ve been following GM stock news this year, you may have noticed that the shares of the Detroit-based automaker have shown notable growth. In fact, GM stock has gained 18.34 percent since opening the year at $33.64 per share on January 2nd, 2019. As of this writing, the current value of GM stock is $39.81, though shares did break the $40 mark for the first time ever on February 6th, then again on February 25th and on Wednesday, April 17th.
A big contributor to the growth is the fact that GM stock has experienced seven consecutive weeks of growth in the first quarter of 2019. The boost started following a GM investors conference prior to the start of the 2019 North American International Auto Show in Detroit. During the investors conference, the automaker presented its strategy for new models intended for developing markets as well as several future Cadillac vehicles and how they will contribute to its bottom line.
In fact, GM is outperforming the Dow Jones Industrial Average in year-to-date performance (January 2nd, 2019 – April 24th, 2019). We can see that two follow a similar trajectory, though the DIJ does so in a much smoother, more gradual manner. Year-to-date, the DJI has posted 14.2 percent growth compared to the 18 percent growth experienced by GM stock.
Those not intricately familiar with the stock market should note that the DJI (Dow Jones Industrial Average) is a stock market index that indicates the value of 30 large, publicly owned companies based in the United States, and how they have traded in the stock market during various periods of time.
We’ve also included the below chart to compare the Big 3 U.S. automakers – GM, Ford, and Fiat Chrysler alongside one another and with DOW as a reference. While GM shares have gained 18 percent in value, Ford shares have gained 18.5 percent, while FCA shares are up 14.7 percent, during the same time frame. FCA shares have been on a rather steady incline since mid-March.
This year has had many highs and lows thus far, as such, we’d say the performance of the auto industry is at least on par with the stock market as a whole despite slumping sales.
Orange: Ford Motor Company. Purple: Fiat Chrysler Automobiles. Blue: General Motors Company
It will be interesting to see how GM stock performance progresses throughout the year, as the company is set to capitalize on several new vehicle launches, including the launch of key new vehicles, including the Chevy Silverado, Blazer, Tahoe and Suburban, the GMC Sierra, Yukon/Yukon XL, and various Cadillac models, including the XT4, XT6, CT5, CT5, and new Escalade. The automaker will also officially debut the highly-anticipated mid-engine Corvette in July. We don’t expect GM’s bottom line to see the impact of these reveals and launches until the 2020 calendar year.
It’s also worth noting that GM has taken many steps over the last few years to increase the value of its stock, including exiting markets where it can’t find ways to turn a profit (such as Europe, South Africa and India), closing plants in various parts of the world, divesting loss-making divisions (such as Opel-Vauxhall), making adjustments to its business model in order to prioritize profitability over chasing market share goals, focusing on its Cadillac luxury brand to increase its share of high-profit automobiles, investing heavily into new-age mobility ventures such as electric vehicles and autonomous driving tech, and discontinuing some sedans (Cruze, Impala, LaCrosse, XTS) to focus on more profitable crossovers, SUVs, and pickup trucks.
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