Hayman Capital Climbs Aboard General Motors
Hayman Capital has given its seal of approval to General Motors (NYSE:GM), making the company one of its largest holdings, Bloomberg reports. Hayman Capital, the fund founded by J. Kyle Bass, has taken on a large number of shares in General Motors, a company that the fund expects will perform well in the coming months. Many large funds and investors have begun to see the automaker favorably as the government has lessened its stake in the company over the past few months. The Treasury recently announced that it will hopefully have completely exited its position in GM by the year’s end, pending market conditions and other seasonal factors.
There are lots of reasons why many on Wall Street think that GM is currently undervalued. The company is expected to double its free cash flow in 2014 from this year, giving it many more options in terms of additional R&D, dividends, or share buyback programs. In addition, the company’s enterprise value is expected to come in at about 3.3 times ebitda for this year, whereas the industry average for large automakers is around 9 times ebidta. By this metric, Ford (NYSE:F), too, may have room to grow, as it’s valued at approximately 4.4 times ebidta for 2013.