GM’s Strong 3rd Quarter Finish

With its unexpectedly strong 3rd quarter report on Oct. 21, General Motors (NYSE:GM) demonstrated that the company is healthy and only getting better. While analysts had estimated GM’s profits would be around $1.19, GM surprised them by instead reporting earnings of $1.50 per share at the end of the quarter. They also reported margins of 11.8 percent, and the company’s CFO, Chuck Stevens, said double-digit margins are expected to extend at least into 2017 before leveling out.

Comparison to Competitors

In comparison to its competitors, GM appears to be in much better shape.Volkswagen (OTCQX:VLKAY) especially is tumbling after news broke of the company’s designing software made to trick carbon emissions tests in the U.S. Volkswagen is estimated to have to pay as much as $18 billion in penalties. That company’s stock declined by 29 percent over two days, and it continues to fall. Ford Motor Co.’s (NYSE:F) 3rd-quarter report was released on Oct. 27. While the company reported higher profits, those profits did not meet the expectations of analysts, and the share prices fell by 5 percent as a result, in contrast to General Motors.

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GM’s Truck Market Share Dominance

GM dominates its competitors with its share in the truck market. The number of pick-up trucks the company sold in Oct. 2015 was 17.7 percent higher than those sold in the prior year. By contrast, Ford demonstrated a 3.3 percent increase over the prior year’s numbers for its F-150 during the same period. When looking at all of its truck market competitors, GM appears to have gained market share over all of them. The company is also preparing to release newly updated Silverado and Sierra pick-up truck models in 2016, making it likely to become increasingly stronger.

Conclusion: Buying Opportunity With Further Growth Ahead

With GM’s dominance in the truck market, consistently strong earnings and double-digit profit margins, we believe it is a good investment choice. As the margins are expected to continue well into 2017 before the market levels, now is a good time for investors to purchase shares of GM.