It’s getting crazy out there…
Aren’t you glad you have a sane voice of reason like the Gorilla to help you sort through all the madness?
If you’ve been trading consistently over the past, say 40 to 50 years, then you know that the market, stocks and the financial world tend to operate under a set of unspoken guidelines that allow investors to make decisions based on the cycles of what happens.
However, right now, it’s like a whole different world.
What’s up is down – what’s down is up – cats and dogs, living in harmony with each other…
It’s total anarchy.
And if you’re looking for a proof of this fact – then you have to look no further than one of the Big Boys: General Motors (GM)…
Because what’s going on there is so baffling – that it’s hard to wrap my head around it.
So, have you been paying attention to GM?
Unless you own shares or are a total investment nerd – you probably haven’t really paid much attention to the car manufacturing giant…
However, if you have been paying attention – then you’re watching one of the stranger events on Wall Street that I’ve seen this year.
What’s happening?
Well, to be honest…
The way this stock is trading tells me that Wall Street knows how to deal with this company in its current form.
See, General Motors is bucking the system right now…
For the past few months, investors tend to tread certain stocks like the proverbial pariah whenever a company hints that they’ll be scaling back on production due to the current semiconductor shortage.
And this is something that GM has hinted a FEW times over the past few months…
However, GM’s quarterly report and solid guidance make it hard to pass up.
For example, GM said it earned $2.25 per share in the first quarter, more than DOUBLING the consensus estimate of $1.08 per share…
While revenue was close to Wall Street’s target – coming in at $32.5 billion – which is about $300 million off from expectations.
Typically, that revenue miss would’ve sent GM shares into the toilet…
But as I said earlier, these are strange times, and so GM seemed to survive this miss – like the earth being grazed by an asteroid the size of Rhode Island.
Why?
Well, it may be because GM shares were already trending downward – as Ford’s (F) quarterly report seemed to put a lot of industry experts on edge – meaning that some caution was already being levied into GM’s price ahead of its earnings report.
However, if you wanted my expert opinion – I would say that the BIGGEST reason that GM survived a case of the downers was due to its guidance…
CEO Mary Barra backed the company’s full-year earnings forecast, leaving 2021 projections untouched despite the global chip shortage.
In a statement, Barra said, “The company is highly confident in its full-year 2021 guidance outlined earlier this year as it works to manage through the semiconductor shortage.”
Wow…
“HIGHLY” confident?
Yes, because according to Barra, GM’s earnings should be at the higher end of its full-year guidance for earnings of $10 to $11 billion – which works out to $4.50 to $5.25 per share — well above Wall Street’s current target of $5.03 per share.
Barra continued, “We think Q2 will be the weakest and start to recover in Q3.”
All in all, GM’s quarterly report was a master class in how to deal with adversity and managing Wall Street’s expectations…
Barra reassured investors on the chip shortage front while holding firm on full-year guidance – all while providing ample leeway to boost expectations as the U.S. economy improves .
In fact, it all but guaranteed that expectations will rise heading into the second half of 2021.
How?
Well, think about it, GM expects $10 billion to $11 billion for 2021 – and in the first quarter ALONE – GM earned $4.4 billion, putting the company almost halfway to its goal. GM would only need to make $1.1 billion in the second quarter to hit the halfway mark..
So, GM set the bar low and any outperformance from here on out will be good news for GM investors.
I wouldn’t be surprised to watch shares rise 5%-7% over the next 6 months…
And if they hit the GorillaTrades trading matrix – you can BET that GT subscribers will be the first to know.
The GT philosophy is to get in and out at the right time in order mitigate risk – but the stock needs to hit certain parameters – 14 of them top be exact – before we can do that…
I can’t really show you how it works from the outside – if you want to understand how GT trading matrix works – you should consider subscribing today.
Now, we understand that there are some people who would rather go it alone – and for those of you that do – good luck…
But if you’re looking for a change and a chance to succeed in market – we’re here for you.
Regardless, you should give GM a look – it could be a good move for 2021.
“The right decision is the wrong decision if it’s made too late.” – Lee Iacocca
