Are GM & Ford a good investment at this time and/or Circuit City?
Best Answer
4085 points
EthanR answered one year ago …
GM and F are unclear at this time. Some have said to buy their preferred shares, rather than the common shares.
I wouldn't touch Circuit City. I think it is one of the worst run companies around. Their stores are a customer service nightmare. Best Buy ( BBY) is the superior company and superior stock, especially with 155 CC stores going out of business. At $24, that stock is very cheap right now. P/E is low and it even has a dividend yield over 2%. BBY has lost several competitors in the past year and the stock has been cut in half. Don't waste your money on a 20 cent stock like Circuit City (CCTYQ).
Answers
2222 points
readytoretire answered one year ago …
The issue with GM and F are what Congress is going to extract to give them money. If they do like they did with Freddie and Fannie, they made the common essentially worthless. I like the bonds better, but Corker in the Senate is pushing to cut the debt by only repaying a third of the debt. Don't know how far that will get. The bonds would be a good play if you think Corker's plan won't get implemented.
As for CC, they are on the pink sheets now and no longer on the NYSE. They are moving in the right direction, but in a market that is running against them. By being in bankruptcy, they can break leases and that should save them about 40M this next year. Now if the consumer starts spending again, they may make it. Maybe as a spec play.
