And those covering the auto stocks have to be puzzled. After meeting with General Motors leaders on Friday, JP Morgan re-iterated its overweight rating on GM shares writing, "...the stock is fundamentally cheap even after considering likely downward trims to H2 consensus for likely T900 (truck) production cuts."
Last week after Ford unveiled a plan to boost global sales 50% by 2015, some analysts called it aggressive but attainable, and then re-iterated buy or positive ratings on the stock. What have F shares done since then? Not much.
My point is not to encourage you to buy shares of Ford, GM, or any other auto stock. I've never given a stock recommendation and never will. But when Wall street is zigging while investors are zagging, I have to point it out. And in this case I'm not sure when investors will heed the advice of analysts? When the industry was on the verge of collapse in early 2009 and Ford said it wouldn't seek a federal bail out or bankruptcy, it took quite a while for investors to realize they were getting a chance to buy Ford shares at an incredible discount.
Are we at another one of those points right now with GM and Ford? Who knows. One thing is clear, investors aren't yet ready to throw the stocks into overdrive.
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