GM shares sink below IPO price

Next move for GM: Harry Wilson
Next move for GM: Harry Wilson

General Motors is feeling the pressure.

Despite growing sales, profits and substantially increasing the amount of money GM returns to shareholders, the company's stock is dead money.

In fact, if you were one of those who bought shares when the new GM went public in 2010 at $33, you would be under water. Or maybe you bought the stock in June 2013, when it was added to the S&P 500 index. In that case, your investment is down 4 percent, while the as a whole is up 29 percent.

Chevrolet trucks are displayed at Novato Chevrolet in Novato, California.
Getty Images

"I don't have an explanation for why investors are shrugging their shoulders when it comes to GM," said Ken Elias, a partner with the automotive consulting firm Maryann Keller & Associates. "GM has made amazing strides. It has a robust portfolio and every vehicle is solid."

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Elias' view is not unique.

Ask most who work in or close to the auto industry about General Motors and the leadership team under Mary Barra and you will generally hear positive comments. Last year, GM set a company record by selling 9.9 million vehicles worldwide. In the process it earned $2.8 billion.

And yet GM shares are stuck in neutral. Even a successful push by activist investors earlier this year that led to GM increasing its dividend and buying back more stock has failed to jump-start the stock.

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One issue has been the perception among some investors that GM and other traditional automotive stocks, such as Ford, represent the "old school" auto industry; companies like Tesla and the supplier Mobileye, meanwhile, are viewed as the "new auto industry."

Since late March, when Tesla was at its most recent low and GM at its most recent high, Tesla's stock is up 55 percent; GM, on the other hand, is down 16 percent.

Tesla sees record deliveries
Tesla sees record deliveries

Although companies like Tesla are steeped in technology for electric and autonomous-drive vehicles, which are believed to be the growth engines of the future for the auto industry, Elias called this perception shortsighted.

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"We're seeing a sea change in the automobile industry when it comes to technology, fuel economy and the types of vehicles being built," he said. "GM is right there. In some cases, it's making these moves before other companies but it's not getting the benefit of the doubt."

GM has likewise created some of the skepticism that's dragged down its shares. The scandal surrounding defective ignition-switches that ultimately lead to congressional hearings and the recall of 2.6 million vehicles weighed on GM's stock much of last year.

"GM, in my opinion, is one of the better auto companies, and the future has never been brighter for the auto industry," Elias said. "But a lot of people don't see the story of how this industry is improving."

Separately on Tuesday, Deutsche Bank lowered its rating on Tesla to "hold" from "buy," citing valuation.

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