Top Three Picks for January 2021 (General Motors)

I've been busy working at the hospital and catching up with my readings hence the delayed update on this blog. Anyhow, as I have promised, I will talk about General Motors and why it is included in my top three pick for the month of January.

Let's go!

What are the PROS?

As I have mentioned in the last post I made about PLUG, there is a dramatic shift towards renewable energy and this means great opportunity for businesses that are in this kind of industry. With the aim to restructure the entire transportation sector with the use of new technology and alternative source of energy, President Biden approved a $2-trillion infrastructure plan which contains a bold plan for a clean energy revolution! This means Electric Vehicle is going to be the next big thing.

General Motors (GM) surprised everyone by relieving its BrightDrop business, which offers a sustainable and smarter way to deliver goods and services through its ecosystem of electric and connected products. It already boasted about FedEx as one of its committed customer (a 500 EV600 delivery vehicles have been set to be delivered to them). By 2025, GM sees a huge $850 billion market opportunity for parcel, food delivery and reverse logistics in the U.S.. Luckily, President Biden's executive order says that it plans to replace the government's fleet of 645,000 vehicles with electric vehicles which is a high opportunity for GM to get into. Not only that, it announced that it will supply Hydotec fuel cells to Navistar for long-haul trucks. It plans to get hydrogen trucks into commercial production by 2024.

Furthermore, GM unveiled the Hummer EV truck which showed the Hummer's CrabWalk mode where it allows it to move diagonally to get through tight off-road spots. A contender of Tesla's Cybertruck and Ford's Rivian, the Hummer EV can travel 350 miles on a full charge and reach 60 miles per hour in three seconds. Aside from its Hummer EV truck, it announced a partnership with Microsoft to accelerate the commercialization of self-driving vehicles through the $2-billion funding round for Cruise.

According to CNN Business, the current consensus among the 18 polled investment analysts is to BUY stock. According to their 12-month price forecast, the median target is $60 (with a high estimate of $80 and low estimate of $48).

What are the CONS?

GM is not the only player in the field. There will be more competition especially with other known rivals such as Tesla in the EV space. Furthermore, the on-going chip shortage curtailing production and the pandemic hitting its earnings. Also, how well will GM execute its plan to shift profit from gas burning SUV to its ambitious EV future plan.

What I think?

General Motors (GM) announced that it aims to stop producing diesel and gas powered cars by 2035 which is personally, I support for mother earth's sake. Furthermore, Morgan Stanley's Jonas had referred GM as having a 'stable of unicorns''. With all its on-going partnerships with big companies and concrete plans for the EV future, it is a worth of a risk to invest into GM.

My Progress...

I bought GM as my birthday gift to myself. I am hoping to aim for the $80 price target.

My next blog is about Pfizer.