General Motors Co.’s purchase of AmeriCredit Corp. will make it easier for the automaker 61 percent owned by the U.S. government to compete with Ford Motor Co. and Toyota Motor Corp., Mario Gabelli said.
GM agreed to buy AmeriCredit for $3.5 billion to reach more customers with leases and loans to borrowers with faulty credit records. The automaker plans to file a prospectus next month and sell shares in November if market conditions permit, according to two people familiar with the situation.
“They need to get back in the game,” Gabelli, who helps oversee $28 billion as chairman and chief executive officer at Gamco Investors Inc. in Rye, New York, said during an interview on Bloomberg Television’s “In the Loop.” “They want to go public. They want to repay the government.”
Gabelli said U.S. shares are cheap. The Standard & Poor’s 500 Index tumbled 16 percent through July 2 after surging to a 19-month high on April 23. The measure, which has risen 7 percent since then, trades for 15.2 times reported profit from the past year. That compares with the average of 16.5 since 1954, according to data compiled by Bloomberg.
The 68-year-old investor said Ben S. Bernanke, chairman of the U.S. Federal Reserve, is taking the right approach in his public remarks on the economy. Bernanke said yesterday that central bankers “remain prepared” to act as needed to aid growth even as they get ready to eventually raise interest rates from almost zero and shrink a record balance sheet.
“He didn’t panic,” Gabelli said, referring to Bernanke’s testimony to the Senate Banking Committee yesterday. “He’s basically the commander you want at the throttles.”