Why GM Stock Outperformed Ford in 2017



General Motors

General Motors (GM), the largest US automaker by volume, ended 2017 on a positive note. By global sales volumes, GM is the third-largest automaker in the world. Globally, Toyota (TM) and Volkswagen (VLKAY) were ahead of General Motors last years in terms of sales volume.

Before we begin exploring how 2017 so far has been for GM, let’s take a quick look at its YTD (year-to-date) performance on Wall Street.

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GM stock outperformed Ford

On December 26, 2017, GM stock was trading with 20.0% YTD (year-to-date) gains. This performance is far better than for Ford (F) and Toyota (TM). Ford and Toyota registered about 3.9% and 9.2% YTD losses, respectively.

General Motors’ strategy to focus more on highly profitable retail sales and cut less profitable fleet sales could be a key reason for this positive price movement. Also, GM led the field in the development of autonomous and electric vehicles (or EVs).

On the other hand, Ford seems to be lacking in its competition when it comes to vehicle automation and EVs. This could be one of the reasons why GM has outperformed its direct US peer, Ford, by a huge margin on Wall Street.

GM’s positive YTD returns were also slightly better compared to the S&P 500 Index’s (SPY) 19.7% returns on a YTD basis.

The Italian-Amercian automaker Fiat Chrysler (FCAU) has impressed investors by delivering 103.7% positive returns so far in 2017. FCAU’s consistently improving profitability and debt condition could be two primary reasons for investors’ optimism in the company.

Series overview

In this series, we’ll take a look at GM’s fiscal 2017 highlights. These highlights will include its recent trends in its earnings, revenues, and profit margins. We’ll also understand how GM’s current leverage position and valuation multiples look entering 2018.


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