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$1,000, 5 Years Later: GM Stock Takes The Slow Road, But Finds Its Way

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$1,000, 5 Years Later: GM Stock Takes The Slow Road, But Finds Its Way

Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return in the past five years is 132.1%. But there is no question some big-name stocks performed better than others along the way.

GM’s Big Run: One company that has been a solid investment in the past five years is U.S. auto giant General Motors Company (NYSE: GM). GM investors who bought back in 2016 and held on through some extremely volatile times have been rewarded for their patience.

Heading into 2016, GM had been a horrendous investment for decades. The company went bankrupt in 2009 and went public again at an IPO price of $33 in 2010. By the beginning of 2016, the stock hadn’t made much progress.

At the time, GM shares were trading at around $33, suggesting virtually no progress from its IPO price six years prior. Shares initially dropped as low as $26.69 in early 2016 amid broad market weakness due to concerns over slowing economic growth in China.

GM rebounded to as high as $46.76 by late 2017, but it spent the next two-plus years trading mostly sideways, a path long-term GM investors were extremely familiar with at that point.

Related Link: How Much A $1,000 Investment In Qualcomm 5 Years Ago Would Be Worth Today

GM made its pre-pandemic 2020 high of around $35 in February before the March market sell-off dropped the stock back down to $14.32, its all-time low since the 2010 IPO.

Fortunately for GM investors, the company finally began to gain some traction as an EV play in 2020 just as EV stocks became one of the hottest investing trends in the market.

In November 2020, GM announced it is raising its investment in electric and autonomous vehicle technology to $27 billion through 2025. The company plans to release 30 new electric vehicle models over the next four years. In addition, GM’s Cruise autonomous vehicle technology subsidiary began testing level 4 fully autonomous vehicles in San Francisco in December.

GM In 2021, Beyond: The next-generation auto tech news sent GM stock soaring to new all-time highs of $57.07 in early 2021.

GM investors who bought five years ago and held on have now outperformed the market during one of its hottest periods in recent history. In fact, $1,000 in GM stock bought in 2016 would be worth about $2,379 today, assuming reinvested dividends.

Looking ahead, analysts are expecting fresh all-time highs for GM in the next 12 months. The average price target among the 16 analysts covering the stock is $60, suggesting 6.4% upside from current levels.

(Photo: GM)

 

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