In the last assessment, you were asked to prepare the first part of your analytics report by creating graphs and calculating some descriptive statis

8

Using Analytic Techniques to Add Meaning to Data

Devan Pouncy

Capella University

Professor: Alex Amegashie

FPX5008

April 13, 2022

General Motors Stock Analysis

Introduction

General Motors Company is a multinational automotive manufacturing organization headquartered in Detroit, Michigan. The company operates in the industry of automotive and it is traded as a GM S&P 100 component. It was founded by Charles Stewart, William C. Durant, and Frederic L. Smith in 1908 in Flint, Michigan, United States. As of 2020, the company had employed over 155000 employees, and its revenue stood at $122.5 billion (Yahoo finance, 2022). The company has four core automobile brands, including Buick, Cadillac, GMC, and Chevrolet. Along with its partners, the company designs manufactures and markets trucks, cars, and automobile parts across the globe. It also offers services related to automotive financing through its General Motors Financial Company which is among its subsidiaries. It sells trucks and cars to daily rental car entities, commercial fleet end-users, governments, and leasing organizations directly or through its dealers' network (Reuters, 2022). Currently, the company operates in North America, the Middle East, South America, Asia Pacific, and Africa. It is ranked at position 22 on the Fortune 500 of the largest corporations in the United States by revenue. It operates in more than eight countries. During its earlier period after its establishment, it led the world market in the automaker industry for over 77 consecutive years until Toyota overtook it in 2008 (Klier and Rubeistain, 2022). The company’s vision is to reduce crashes, emissions, congestions to zero level (General Motors, 2022). One of the common competitive advantages of the company is the cost leadership strategy that it employs in its marketing strategy. The approach helps the company to offer attractive low costs and corresponding low prices of its vehicles. It operates in one of the competitive automobiles industries, with major players such as Ford Motor, Tesla Motors, Honda, and Chrysler offering it competitive pressures.

Graphical Representations of Data

Scatter plot of the highest stock price

               To create a scatter plot for the highest stock price, you select the whole column labeled High. Then, select the column labeled time. After selecting, click the Scatter on the insert tab chart command button. Select the subtype of Chart without any lines. Confirm the chart data with the organization values as presented in its stock data.

Scatter plot of the lowest stock price

Similar to the first graph, select the whole column labeled Low. Then, select the column labeled time. Click the Scatter on the insert tab chart command button. Select the subtype of Chart without any lines. Confirm the chart data with the organization values as presented in its stock data.

Histogram of the adjusted daily closing stock price

To create the histogram for the adjusted closing price, find the minimum value of the set of data from the column labeled adjusted closing price using the formula Excel’s MIN() function. Likewise, find the maximum value of the set of data using the formula Excel’s MAX() function. The, obtain the different between the maximum and minimum values as range. Open the data analysis dialog box through data tab followed by analysis commands group. From the data analysis dialog box, select the option with Histogram. The histogram dialog box will appear where you input the range obtained from the difference between the maximum value and the minimum value.

Histogram of the stock trading volume

Similarly, to create a histogram for stock trading volume, find the minimum value of the set of data from the column labeled volume using the formula Excel’s MIN() function. Likewise, find the maximum value of the set of data using the formula Excel’s MAX() function. The, obtain the different between the maximum and minimum values as range. Open the data analysis dialog box through data tab followed by analysis commands group. From the data analysis dialog box, select the option with Histogram. The histogram dialog box will appear where you input the range obtained from the difference between the maximum value and the minimum value.

Descriptive Statistics

Calculating the Mean, Median and Mode

To calculate the mean for the first graph, click on an empty cell followed by the formula AVERAGE (C2:C255). Press enter on the keyboard to display the result mean, 55.39923 for the column labeled High. Based on Medium, you select a cell where the median result will be displaced. In the selected cell, you type the formula =MEDIAN (C2:C255), which in our case was 56.755 for the column labeled High. On the other hand, to calculate the mode, you take the data into a single column for each set. For instance, one can type the data into F1 to F20 if they have one data set. In the cell that should display the mode result, type the formula MODE (F1: F20) to obtain the mode. Based on our case, the model was 57.74 for the column labeled High. Also, for the standard deviation, you calculate the mean, and for each value, you calculate the distance to the mean result. You then square the distance of each number and then find the total of the values. The answer is then divided by the number of data points. The square root is calculated to obtain the standard deviation for the obtained value. The short form in excel is by using the formula STDEV.P function, which will execute all the steps at once. The steps are followed when calculating the mean, median, mode, and standard deviation for the scatter plot of the lowest stock price, histogram of the adjusted daily closing stock price, and histogram of the stock trading volume graphs.

Summary

               A high stock price means that the company's P/E ratio is higher, thereby making it harder for the shareholder to purchase its shares. A high stock price indicates when its stock price is at its highest level. Based on the graph, the company retained its high stock price at an average of 55.00 throughout the 52 weeks (Stock Analysis, 2022). The value never went higher or lower, thus making it easier for shareholders to identify their fate after purchasing its stock. On the other side, the company's lowest price indicated the lowest point when it sold its stocks cheapest to the shareholders. It retained its lowest price at an average of 53.80 throughout the 52 weeks.

               The adjusted closing price amended the company stock's closing price, which reflected the value of stock after accounting for any actions by the organization. It showed the raw price, which could be used as the cash value of the last transaction price before the market's closure. Based on the graph, the closing price of General Motors was higher during the earliest of 2021, and it became lower as days were moving towards 2022. On the other hand, A standard deviation (or σ) measures how dispersed the data is in relation to the mean. Low standard deviation means data are clustered around the mean, and high standard deviation indicates data are more spread out. The company’s volatility of its stocks was highly conspicuous in the beginning of 2021. It earned $2.25 a share in the 2021 first quarter in comparison to 2022 first quarter (Macroaxis, 2022). The company had a volatility of 2.65 and is 2.52 times more volatile than DOW. Twenty two of all equities and portfolios are less risky than GM.  

               A price by volume, the histogram chart shows the company's volume of shares traded over a given frame of time. The price by volume was listed on the Y-axis of the histogram, while the frequency was listed on Y-axis. Based on the graph, it is evident that most volumes throughout 2021 to 2022 were at the frequency of 7. This indicates that the point that reflects the volume of 16.9 million served as the key areas that supported and offered resistance to the company towards the end of the period.    

               In conclusion, the stock of General Motors is up to eight percent year-to-date. Although it is better than having none, the company's stock is underperforming compared to the twenty percent gains by the S&P 500. Based on the analysis above, it is evident that a consensus target price beyond the market of $47 will reflect a 30 percent upside along with a four percent dividend. These make the organization look more compelling in purchasing its stock today. One major pro for General Motors stock is the company's fresh new deal with the United Autoworkers, the massive union that, for many carmakers, can spell gloom or doom should a strike arise. Putting 48,000 workers back to work under a four-year deal cannot be bad for GM shareholders, who need peace of mind after a month of nervous worrying about production problems. 

References

General Motors. (2022). About US. Retrieved from;

https://www.gm.com/company/about-us

Klier, T., & Rubenstein, J. (2020). Overview of the US Automobile Industry. In New Frontiers of the Automobile Industry (pp. 41-66). Palgrave Macmillan, Cham.

Macroaxis. (2022). GM Stock Volatility. Retrieved from;

https://www.macroaxis.com/volatility/GM/General-Motors

Reuters. (2022). General Motors Company. Retrieved from;

https://www.reuters.com/companies/GM.N

Scott, P. (2022). General Motors’ other franchise system: Creating an effective distribution model for Frigidaire. Business History, 64(1), 183-200.

Stock Analysis. (2022). General Motors Co. (NYSE:GM). Retrieved from;

https://www.stock-analysis-on.net/NYSE/Company/General-Motors-Co/DCF/CAPM

Yahoo finance. (2022). General Motors Company (GM). Retrieved from;

https://finance.yahoo.com/quote/GM/history?p=GM

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Histogram

Count

< = 43 < = 48 < = 53 < = 58 < = 63 < = 68 < = 73 < = 78 < = 83 < = 88 > 88 14 21 50 81 78 10 0 0 0 0 0

Closing price

Frequency

Histogram

Count

< = 8400000 < = 8900000 < = 9400000 < = 9900000 < = 10400000 < = 10900000 < = 11400000 < = 11900000 < = 12400000 < = 12900000 > 12900000 1 1 4 3 5 8 8 11 12 8 11

Volume

Frequency

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