Taking Bets on Hummer’s Buyer

by The Investment U Research Team

We’ve quite a little pool in the office going over who the undisclosed buyer is for General Motors (NYSE: GM) Hummer brand. GM announced yesterday that it had a laundry list of buyers who were lining up for Saturn – they’re also looking to unload the Saab and Pontiac brands.

The joke around here is that it’ll have to be a buyer from an oil rich nation considering the gas mileage of a Hummer. But it will most likely be a foreign buyer, with private funds. Like Dubai World or from the Asian rim nations. Another possibility is a buyer from India.

But its purchase makes sense on other levels of course. Hummer is very popular overseas, and like many popular iconic brands, its popularity will live on past GM’s woes.

While Hummer’s popularity is debated – many see these large SUVs as the antithesis of the green movement because of their inefficiency and gas guzzling needs – the fact of the matter is this brand keeps producing vehicles that a small group of devoted buyers like.

Unfortunately, we don’t see an angle for investors that will allow them to profit from this. Our only thought lies in bottom feeding on the bankrupt stock price of GM. It will hit a bottom like American International Group (NYSE: AIG), Citigroup (NYSE: C) and a number of other crash casualties, which have all risen since their bottoms.

Symbols mentioned in this article: GM, AIG and C.

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