I just noticed GM is trading exactly at book value. plus they have $2.80 EPS. why are they so cheap? Do they have a significant future liability that's not being considered in their book value?
maybe they are bankrupt and would like to sell you worthless stock at 19 85 promising to give you back $3
Did you look at their earnings any more than eps? $2.8 is bad by the way. Lots of companies trade under book value -all financial stocks trade under or a little higher than book value. Unions are bad -and the government may be forced to liquidate their position -lower prices for us!
that's because the book value of financial stocks can't be trusted. Their balance sheets are a tangled mess. They are so heavily invested in leveraged instruments (derivatives) that their book value can plummet almost overnight, as it did in 2008. GM's book _should_ be more straightforward, since they spun off their financial arm (GMAC) years ago