GM’s ‘Bright’ idea on hybrid van – good investment or PR move?
Is General Motors serious about electric cars? It sure looks like it.
As GM prepares to sell its Chevrolet Volt electric car to the masses, it’s also investing in Hoosier startup Bright Automotive. The companies aim to bring a plug-in gas/electric hybrid van to market in 2013. So hurray for GM. But don’t go storming the barricades just yet.
Sure, at first glance this looks like absolutely the right idea. We know that companies ranging from battery makers such as A123 and Ener1 to automakers such as Toyota and Tesla are placing big bets on electric vehicles becoming the wave of the future. So on the one hand, GM has fiscal rectitude on its side. On the other hand, it’s most definitely “politically correct.”
But despite the size of the idea, check out the size of the investment. GM’s investment in Bright is exceedingly tiny: just $5 million. That’s less than what it would pay for a minute’s worth of commercial airtime during the Super Bowl. For a company that hit up U.S. investors for tens of billions of dollars, $5 million isn’t an “investment” in electric vehicles. It’s chump change.
Then again, maybe that’s GM’s brightest idea yet. At this price, it doesn’t matter whether the new van succeeds or not. GM’s bought itself some good PR at a very good price.
Ask the Fool
Q: What can you tell me about stock ticker symbols? – M.M., Fort Myers, Fla.
A: A ticker symbol is a short identifier for a company’s stock. Tickers of companies on the old, respected “big board,” the New York Stock Exchange, generally have three or fewer letters – for example, K for Kellogg, V for Visa, BA for Boeing and XOM for ExxonMobil. Tickers of stocks trading on the Nasdaq Stock Market usually have four letters (such as MSFT for Microsoft and SBUX for Starbucks).
Sometimes you’ll see a fifth. If so, it’s not technically part of the ticker – it’s tacked on to reflect something about the company. For example, an F means it’s a foreign company and a Q means it’s in bankruptcy proceedings.
To look up a company’s ticker symbol online, click over to sites such as http://finance.yahoo.com and type the company name in the search box. Alternatively, call the company or your brokerage and ask. Newspaper stock listings also usually include ticker symbols.
Q: I know that Southwest Airlines has an amusing ticker symbol, LUV. What other clever ticker symbols are out there? – R.B., Richmond, Va.
A: Well, there’s Yum! Brands (YUM), the parent of KFC, Taco Bell and Pizza Hut; explosives specialist Dynamic Materials (BOOM); Brinker International (EAT), the parent of Chili’s; 3M (MMM); Molson Coors Brewing (TAP); Gibraltar Industries (ROCK); Meta Financial (CASH); Franklin Resources (BEN); Sotheby’s (BID); Olympic Steel (ZEUS); and amusement park company Cedar Fair (FUN).
Before it was acquired by the Roche pharmaceutical company, Genentech traded under DNA. Eyewear maker Oakley, before its own buyout, traded under the symbol OO. (Think about that last one, if you don’t get it at first.)
Several years ago, I had money to invest and remember choosing between the American Italian Pasta Co. and the spice giant McCormick. I was impressed with the pasta company’s smooth and strong growth of revenue and earnings. I figured I couldn’t go wrong with it, and that spices were just a commodity. Well, an SEC investigation into accounting fraud soon after I bought my stock made my stomach churn. I learned that there isn’t much brand power to pasta, but spices and condiments can have pricing power. – Felix E., Singapore
The Fool responds: The pasta company ended up bring investigated by the SEC and the Department of Justice and was slapped with a class-action suit, as well. Several pasta executives pled guilty to deceiving investors by overstating earnings. American Italian Pasta Co. is now being bought by the food company Ralcorp.
Spices and commodities aren’t always boring. McCormick’s stock has surged more than 25 percent in the past year and has averaged 13 percent growth annually over the past 10 and 20 years.