Third Avenue Value Fund manager, Robert “Chip” Rewey, slashed 696,700 shares of General Motors (GM, Financial), a 53% reduction to his position, during the second quarter. The sell had a -1.75% impact on the Third Avenue Value Fund portfolio.
Headquartered in Detroit, Michigan, General Motors designs, builds and sells cars, trucks and automobile parts. General Motors employs more than 215,000 employees worldwide across six continents. Its automobile brands include: Chevrolet, Cadillac, Buick, GMC, Opel, Vauxhall, Holden, Baojun Wuling and Jiefang.
General Motors Co. has a market cap of $47.53 billion, a P/E ratio of 4.62, an enterprise value of $97.65 and a P/B ratio of 1.14.
According to GuruFocus, General Motors has one severe warning sign and three medium warning signs, which may have influenced Rewey to reduce 696,700 shares of the company during the second quarter.
- General Motors' gross margin has been in long-term decline at an average rate of 2.1% per year. The company's gross margin is ranked lower than 79% of the companies in the global auto manufacturers industry. This is a severe warning sign for investors.
General Motors also has three medium warning signs:
- It has issued $44.8 billion of debt over the previous three years. General Motors has reported operating losses over the past three years, and has a forward P/E that is higher than its trailing P/E.
Rewey’s decision to slash a stake in GM during the second quarter may have also been influenced by recent claims filed against General Motors. These claims include racketeering as well as some state law claims. On July 15, the charges were thrown out by U.S. District Judge Jesse Furman in Manhattan federal court. Read the report here. Â
Below is a Peter Lynch Chart for General Motors, which shows that its trading below its intrinsic value.
Disclosure: Author does not own any shares of this company.
