GM and Ford could get huge goverment grants for Electric vehicles, (maybe).

 

 Stock Talk

 Back in October 2020, I posted this about the ev space...

 

"Electric vehicles are coming on. Tesla has worked its way as the leader and is currently trading at $431 per share after the split. The TSLA eps is listed as 0.39 and a PE of a whopping 1,118.  General Motors (GM) trades as $36 with an eps of $1.06 and a PE of 34."

 

That was when GM was at $36.  Today, GM is at $57 ish.

 

Looking at recent quarters GM earnings remained very good.  However the global chip shortage in semiconductors that control some of the basic features of automobiles had caused both Ford and GM to shutter some production and downward revise earnings estimate.  When it looked like the chip shortage could be protracted, GM faded from pushing into the 60's to the current 57 range.  But things could change.

The support comes from the hope from the "Green new deal" strongly pushing for electric vehicles built in America.  It's hard to predict how this new "infrastructure" plan that has a lot of socialist inclined pork will actually play out.

The Democrats have the majority votes and we have seen how they work it.  The one thing that may last is the ev plans because China has many ev car companies and the US is currently behind.  That does not play well and maybe our Government is justified in helping GM and Ford.

 

The Jones view:   For these reasons and the fact that fundamentally on a PE basis -  (for example) GM is a much under appreciated as compared to the highly priced Tesla , it seems like dipping toes into GM and Ford in small buy lots  may have a chance to do well.  If huge government grants go to GM and Ford , watch out.  These are possibilities of the future but we can't trust a crystal ball, so perhaps -  "some" is a word that applies.

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ALL in my humble opinion, scroll down and read more.. 

This site does NOT make Buy / Sell recommendations.
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