Why would a mutual fund portfolio manager continue to hold
Despite continued speculation that the company might file for bankruptcy and the fact that its debt has been marked down to "junk," many managers evidently are banking on a turnaround at the company, The Wall Street Journal reports.
While fewer mutual funds hold the stock now than a year ago - 227 versus 292 - they still account for a sizable chunk of the Detroit automaker. Of the company's total market cap of $13.1 billion, mutual funds own $2.84 billion, or 21% of total shares. That's quite a vote of confidence.
Providence, R.I.-based
Further, those funds that bet on stocks with the highest dividend yield are interested in GM. Dividend yields are calculated by dividing the dividend by the stock price, so as a stock's value decreases, its yield increases.
For its part, GM has pledged that it has a turnaround plan and is addressing "the structural issues" it faces.