GM Requests Lawsuit Protection

General Motors Co. (GM) revealed that it will appeal to a New York federal bankruptcy judge for protection against legal claims related to the late recall of vehicles with defective ignition switches. The company is currently facing more than 36 ignition switch lawsuits.

General Motors said that claims related to actions by the old GM before going into bankruptcy should legally belong to the old company which now operates under the name of Motors Liquidation Co. The new GM formed post-bankruptcy enjoys legal protection against the lawsuits filed before the bankruptcy. During bankruptcy in 2009, General Motors faced 2,500 lawsuits of different types.

To its defense against the faulty switch recall, the company stated that though the recall of 2.6 million vehicles with faulty ignition switches was initiated in Feb 2014, the problem traced back to 2001. However, the company is focused on resolving the issue and is considering compensation for the families of the crash victims.

Recently, CEO of General Motors, Mary Barra announced that the company has hired Kenneth Feinberg to find out ways to compensate the victims of the accidents due to the ignition switch fault. Kenneth Feinberg is known for handling the compensation funds for the victims of 9/11, the Boston Marathon bombing and the BP (BP) oil spill. Allocation of separate funds for victims is not yet confirmed.

In Feb 2014, General Motors announced the recall of 2.6 million older-model small cars associated with 31 crashes and 13 front-seat fatalities due to faulty ignition switches. The recalled vehicles mainly include Chevrolet Cobalts and Saturn Ions.

Considerable costs associated with the repair are a potential reason behind the delayed recall. General Motors identified the switch problem in 2001. As a matter of fact, the engineers provided different options to rectify the defect but none of them were accepted due to cost concerns.

According to General Motors, a heavy key ring or uneven roads can cause the ignition switch to shift away from the run position, thus turning off the engine and electrical power. In such a situation, the front air bags will not inflate in case of a crash.

General Motors currently holds a Zacks Rank #5 (Strong Sell).

Better-ranked automobile stocks worth considering are Tesla Motors, Inc. (TSLA), PACCAR Inc. (PCAR) and Fox Factory Holding Corp (FOXF). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on GM
Read the Full Research Report on BP
Read the Full Research Report on PCAR
Read the Full Research Report on TSLA
Read the Full Research Report on FOXF

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Why General Motors (GM) Stock Is Up Today

NEW YORK (TheStreet) – General Motors (GM) was gaining 1.7% to $33.92 Wednesday after the automaker asked a federal court in Texas to postpone lawsuits against it related to ignition-switch defects in vehicles made before the company exited bankruptcy in 2009.

GM said it is protected from liability for claims for incidents that happened before it exited bankruptcy. The automaker filed a motion to stay lawsuits related to recent recalls while it tries to get clarification of the extent of its protection from the bankruptcy court.

According to Reuters, the company filed a similar motion with the U.S. District Court for the Northern District of California earlier, asking for a stay on pending cases.

At the New York International Auto Show GM CEO Mary Barra will create a global product integrity group to improve its handling of safety issues in the future.

Must read: Warren Buffett’s 10 Favorite Growth Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

“We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.”

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue appears to have trickled down to the company’s bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 291.54% to $3,058.00 million when compared to the same quarter last year. In addition, GENERAL MOTORS CO has also vastly surpassed the industry average cash flow growth rate of 31.15%.
  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock’s price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • GENERAL MOTORS CO has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $2.35).
  • You can view the full analysis from the report here: GM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Hyundai Hope On Wheels Rings NASDAQ Stock Market Opening Bell

NEW YORK, April 16, 2014 /PRNewswire/ – Hyundai Hope On Wheels®, a nonprofit organization committed to helping kids fight cancer, rang the NASDAQ Stock Market Opening Bell this morning at the NASDAQ MarketSite in New York’s Times Square.  The event honored Hyundai Motor America‘s 16th year in the fight against pediatric cancer.  Chairman of the Hyundai Hope On Wheels Board of Directors Mickey Pong was joined by the organization’s newly named National Youth Ambassadors Ashley Burnette and Kenny Thomas in ringing the Opening Bell. 

“We are honored to commemorate our 16th year in the fight against pediatric cancer at the NASDAQ MarketSite,” said Mickey Pong.  ”Hyundai and all of us dealers are committed to ending pediatric cancer and we appreciate NASDAQ for lending its platform to this important cause.”

On Thursday, April 17, Hope On Wheels will officially launch its 2014 program during a special press conference at the Jacob K. Javits Convention Center in New York City.  As part of the event, recipients of 2014 Hope On Wheels grants from the New York City area will be recognized and all other recipients will be announced.  By the end of this year, Hyundai Hope On Wheels will surpass $86 million in support of pediatric cancer research since 1998.

For more information about Hyundai Hope On Wheels, please visit www.HyundaiHopeOnWheels.org.

HYUNDAI HOPE ON WHEELS
Hyundai Hope On Wheels® is a 501(c)(3) nonprofit organization that is committed to finding a cure for childhood cancer.  Launched in 1998, Hyundai Hope On Wheels provides grants to eligible institutions nationwide that are pursuing life-saving research and innovative treatments for the disease. Primary funding for Hyundai Hope On Wheels comes from Hyundai Motor America and its more than 800 U.S. dealers.  At the end of its 16th year, Hyundai Hope On Wheels will have awarded more than $86 million towards childhood cancer research in pursuit of a cure.

HYUNDAI MOTOR AMERICA
Hyundai Motor America, headquartered in Fountain Valley, Calif., is a subsidiary of Hyundai Motor Co. of Korea. Hyundai vehicles are distributed throughout the United States by Hyundai Motor America and are sold and serviced through more than 820 dealerships nationwide. All Hyundai vehicles sold in the U.S. are covered by the Hyundai Assurance program, which includes the 5-year/60,000-mile fully transferable new vehicle limited warranty, Hyundai’s 10-year/100,000-mile powertrain limited warranty, and five years of complimentary Roadside Assistance. Hyundai Assurance includes Assurance Connected Care that provides owners of Hyundai models equipped with the Hyundai Blue Link telematics system with proactive safety and car care services complimentary for three years. These services include Automatic Collision Notification, Enhanced Roadside Assistance, Vehicle Diagnostic Alert, Monthly Vehicle Health Report and in-vehicle service scheduling.

For more details on Hyundai Assurance, please visit www.HyundaiAssurance.com 
Please visit our media website at www.hyundainews.com and our blog  at www.hyundailikesunday.com 
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Hyundai unveils '15 Sonata

New York Hyundai Motor Co. unveiled its 2015 Sonata, a mildly restyled midsize car billed as a much better performer under the hood with luxury performance and safety.

Hyundais U.S. brand chief Dave Zuchowski said success in offering dramatically bold styling in 2011 in the Sonata sent a message to Toyota, Honda, Ford and the rest of the industry.

We really set the styling trend, Zuchowksi said Tuesday at the New York International Auto Show. I think they got the message you dont have to be an appliance to compete in that segment. You can be stylish. You can have high performance and you can have great fuel economy and it works.

The latest car is less striking and more handsome, Zuchowksi said an evolutionary, rather than a radical upgrade. He said in 2011, We had to almost stand out and shout and pound our chests and say Look at us, we need to break through. You dont need to break through every time.

He noted that the competitive mid-size car segment is even tougher as Japanese automakers bolstered by a weaker yen add content to vehicles so that they are a better value than they were five years ago, and its squeezed our value proposition.

Sonata sales are down 15 percent this year, but it remains the automakers second-best selling car, accounting for about a quarter of all U.S. Hyundai sales.

The all-new seventh-generation 2015 Sonata, has a stiffer body structure, better ride quality, reduced noise, vibration and advanced safety and convenience features. The new Sonata will be built at the Hyundai Alabama plant in Montgomery, Ala., and go on sale early this summer.

He said Hyundai is moving to styling language that people will be able identify as a Hyundai. Just like when you walk by, you can tell a Mercedes, or you can tell a BMW, we think in the next couple products youre going to be able to tell its a Hyundai.