Chair & CEO At General Motors Exercises Options Worth $2.35M

Highlighted on October 24, it was unveiled in an SEC filing that Barra, Chair & CEO at General Motors GM, executed a significant transaction involving the exercise of company stock options.

What Happened: In an insider options sale disclosed in a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, Barra, Chair & CEO at General Motors, exercised stock options for 206,824 shares of GM. The transaction value amounted to $2,354,691.

The latest update on Friday morning shows General Motors shares up by 0.12%, trading at $52.78. At this price, Barra's 206,824 shares are worth $2,354,691.

About General Motors

General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has eight brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company regained its us market share leader crown in 2022, after losing it to Toyota due to the chip shortage in 2021. 2023's share was 16.5%. GM's Cruise autonomous vehicle arm has previously done driverless geofenced AV robotaxi services in San Francisco and other cities but stopped in late 2023 after an accident. It restarted service in 2024 but not in California. GM owns over 80% of Cruise. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.

Financial Milestones: General Motors's Journey

Revenue Growth: General Motors's revenue growth over a period of 3 months has been noteworthy. As of 30 September, 2024, the company achieved a revenue growth rate of approximately 10.48%. This indicates a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Key Profitability Indicators:

• Gross Margin: The company faces challenges with a low gross margin of 13.12%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, General Motors exhibits below-average bottom-line performance with a current EPS of 2.71.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 1.8, caution is advised due to increased financial risk.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 5.63 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.34 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 6.05, General Motors could be considered undervalued.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Why Pay Attention to Insider Transactions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

In the context of legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Navigating the World of Insider Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of General Motors's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.