Talking Numbers

Why GM's recalls could be an opportunity for investors

Why GM's recalls could be an opportunity for investors

General Motors is now issuing a recall of its most popular car, and its CEO says more recalls are possible. With the stock down nearly 10 percent this year, is GM just too much of a risk for investors?

In an interview Thursday with Matt Lauer on NBC's "TODAY" show, GM CEO Mary Barra said it's possible we could see more recalls in the future.

Lauer: Are you done with recalls? I mean, this has been a long line of recalls, 20 million cars in the last year or so. Are you done?

Barra: We're going to continue and look at the data that we get and take the action that we need. That's our commitment to customers. If we find an issue, we're going to deal with it.

Lauer: So, it's possible we could be hearing more recalls down the road?

Barra: It's possible.

The interview comes as General Motors told dealers in North America to stop selling 2013 and 2014 versions of its best-selling car, the Chevrolet Cruze, after 33,000 of them were found to have potentially defective air bags.

(Read: )

Year-to-date, GM has recalled 20 million vehicles worldwide. That's three times the amount of all vehicles sold by all companies in North America since the start of 2014.

Gina Sanchez, founder of Chantico Global, said quality control at GM is getting closer scrutiny and this may help the company in the long run.

"While this is going to impact the stock price now, looking forward, you could actually see a much more improved company," said Sanchez, a CNBC contributor. "This is a very large company and the culture is ingrained. So, it's going to take quite a bit of movement."

Sanchez said recalls happen with every car company and are a cost of doing business. Though the stock is being punished in part for it, she believes GM will eventually recover.

"There could be a light at the end of the tunnel," Sanchez said. "For right now, GM is trading cheap and it could be an interesting opportunity for a longer-term buy."

(Read: A crisis of GM proportions is coming)

Ari Wald, head of technical analysis at Oppenheimer & Co., has the opposite view of GM's stock. "I almost see it the other way around," he said. "I can get behind shares of GM as a trade now but I have less conviction about it as a longer-term idea."

Wald likes GM as a short-term trade because he sees the technicals as giving risk/reward levels. On the downside is a support level of $35.50 per share. "As long as the stock is above it, I think it moves higher," he said. "If it can't move above it, I'm wrong and you close out the position."

The reward, according to Wald's chart, is the $42 level, near its December 2013 high. "I think it can get back to its $42 peak," said Wald. "It's a pretty attractive risk/reward. I'm not as convinced it can get to new highs so I'd like to re-examine the trade at that point."

To see the full discussion on General Motors, with Sanchez on the fundamentals and Wald on the technicals, watch the above video.

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