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Hier mal was von Barrons. Da es das größte Anlegermagazin in der USA ist, könnte es natürlich auch ein Kontraindikator sein. Preferred Vehicles For small investors hoping for a GM turnaround, auto giant`s Big Board-listed bonds are a good bet By ANDREW BARY BOTTOM-FISHERS HAVE BEEN EYEING General Motors` depressed shares since the auto giant recently shocked Wall Street with news that it expects much weaker-than-expected 2005 earnings and cash flow. As Barron`s has noted, the better buy could be GM`s battered bonds, many of which yield 9% -- two points more than typical junk bonds. But what`s the best way for small investors to play them? It`s generally not easy for individuals to buy corporate bonds because most change hands in an over-the-counter market dominated by big institutions that trade them in round lots of $1 million. Smaller purchases of $10,000 or $100,000 can produce wide spreads between the price at which the paper is bought and sold. But GM (ticker: GM) has more than $10 billion of debt tailored for individuals. It trades like equity on the New York Stock Exchange in increments of $25. As the table shows, investors have a wide choice of Big Board-listed securities, including regular, or "straight" GM bonds; debt that is convertible into GM common, and debt issued by GM`s huge finance unit, General Motors Acceptance Corp. All the bonds have stock symbols and can be traded easily through online and full-service brokers. The bonds often are listed in newspapers in the Big Board preferred stock tables. But these issues are debt, and thus rank higher in the company`s capital structure than equity-like preferred. That means they offer their owners far more protection than stock would if General Motors sought bankruptcy protection. Thanks to high yields, the GM bonds have equity-like characteristics. Indeed, some rose a point, or 5%, Thursday, after GM said that, to cut its enormous health-care costs, now running at $5.6 billion annually, it will seek concessions from the United Auto Workers. GM`s mid-March earnings bombshell has prompted doomsday commentary about the company`s prospects, even the potential for bankruptcy, something that John Devine, the car maker`s chief financial officer, has dismissed as unrealistic. GM now expects to earn just $1 to $2 a share this year, versus its prior estimate of $4 to $5 a share and $6.40 in 2004. It projects $2 billion in negative cash flow this year, against a prior estimate of a positive $2 billion. GM cars and trucks are piling up on dealer lots, U.S. market share is eroding, employee-benefit obligations are gargantuan, and many investors have disdain for GM vehicles and its top management. General Motors stock, now below 30, is half of its price in 1965. Yet, "people underestimate the liquidity at GM," says one big institutional investor. "Companies go bankrupt because they run out of liquidity. This company has tremendous liquidity." Indeed, GM ended the year with $19.8 billion of cash and equivalents, and long-term debt of $30.5 billion. None of it is short-term. GM`s net debt of nearly $11 billion is hardly a crushing burden for a company with global sales of $162 billion and $8 billion of cash flow last year. GMAC had $37 billion of cash and equivalents at year-end, dwarfing its $8 billion of short-term commercial paper. GMAC`s absolute debt level of $269 billion is enormous. But GMAC resembles a giant bank. It has $200 billion of loans and receivables, mostly backed by GM cars. GMAC is highly profitable, earning $2.8 billion in 2004, with a quality loan book. "People are going to pay their loans on their Chevy Suburbans because they need to get to work," says David Feinman, a portfolio manager at Havens Advisors in New York. Big Menu for Small Investors Even though their bond ratings are near junk levels, GM and GMAC appear in little risk of imminent financial trouble. The big fear is, in the words of Morgan Stanley credit analysts, GM is "a cyclical company in secular decline." This year is shaping up as a poor one for GM, but 2006 could be much better. In a research note titled "Cash-flow crisis? Maybe Not," J.P. Morgan equity analyst Himanshu Patel, recently wrote that GM`s cash flow could swing to a positive $6.9 billion in 2006. Next year, GM will be rolling out new SUVs and large pickups, which should boost sales and produce earnings of $3.50 a share, he predicts. In addition, GM has been profitable in recent years, mainly owing to GMAC`s earnings. While its unfunded health-care obligation is enormous at $57 billion, that liability is a long way off and the company has put aside $20 billion to partly offset it. GM`s U.S. pension fund is fully funded. Among GM bonds, the straight debt listed on the Big Board has certain advantages, relative to the institutional debt, notably transparency and liquidity. But the NYSE-listed debt yields about a half-percentage point less than GM`s benchmark long-term debt issue, the 8[frac38]s of 2033, which yields 9.5%. The Big Board issues also are callable, meaning GM can redeem them prior to maturity. This limits their upside potential above their face value of $25. But since the bonds trade below $25 now, the call feature isn`t much of a worry. It pays to buy bonds with the most time until the first call date, which for the GM straight bonds are the 7.5% issue (ticker: GMS). This best value among GM debt may be its convertibles because they offer high yields and greater sensitivity to the stock price than the straight bonds. The largest and most liquid are the $4.3 billion of 6¼% convertibles due 2033 (GPM). They ended Thursday at 21.78, for a yield to maturity of 7.35% and a yield to the put in 2018 of 7.87%. (A put lets investors redeem at their option.) If the shares rally, so will the convertibles. Lots of Debt, but... GM and GMAC also have substantial liquidity and cash flow. GM Bil Cash $19.8 Debt 30.5 2005 cash flow (est.) -2.0 Equity 28.6 -------------------------------------------------------------------------------- GMAC Bil Cash, Marketable Securities 37.9 Loans and Receivables 203.0 Equity 22.4 Debt 269.0 Source: Company reports Some investors may wonder why they should buy the converts when GM common yields almost 7%. Answer: The $2 annual dividend could be cut, as GM scrambles to revive. Indeed, the bonds could rally if GM cuts or eliminates the dividend, which would save $1 billion annually The 4.50% convertible (GXM) has a relatively high price of $23.48 because it can be redeemed at the holder`s option in 2007. The 5.25% convert (GBM) trades at a deep discount of 19.23, providing a yield to maturity in 2032 of 7.22% and a yield to the put date in 2014 of 9.12%. GMAC debt generally yields slightly less than regular GM debt because the finance unit is profitable and because many investors believe that even if GM is forced into bankruptcy, GMAC would remain unscathed and its bonds money good. GMAC`s challenge will be if it and GM lose their investment-grade credit ratings. No major finance company has existed for long with a junk-grade rating. Moody`s rates GMAC Baa1 and the parent Baa2. Standard & Poor`s rates both triple-B-minus -- a notch above junk. There`s clearly risk in GM and GMAC debt, but the yields compensate for it. GM might not be too big to fail, but it remains one of the nation`s largest companies and biggest employers, with 181,000 workers in North America and 324,000 worldwide. GM also is supporting 420,000 retirees. It`s in the interest of the company, the government, shareholders and unions to find ways to make the company more competitive in the brutal global auto market. That bodes well for GM bondholders. |
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| aus der Diskussion: | GM-Anleihen |
| Autor (Datum des Eintrages): | JuanCarlos (09.04.05 17:12:09) |
| Beitrag: | 27 von 110 (ID:16336607) |
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