NEW YORK (CNNMoney.com) -- Two of General Motors' largest shareholders have trimmed their holdings in the battered automaker, which also got another analyst downgrade.

Shares of GM were down 1.2 percent to $30.62 a share in early trading Thursday on the news of the share sales and the latest downgrade.

Capital Research & Management Co., a Los Angeles-based investment firm that is the company's No. 2 shareholder, disclosed in its quarterly holdings filing with the Securities and Exchange Commission that during the second quarter it shed 19 million shares of GM (Charts), or about 24 percent of its holdings. The firm still had a 10.77 percent stake in GM following the sale.

No. 3 shareholder Brandes Investment Partners, also trimmed its GM holdings, according to its SEC filing. That firm shed about 2.5 million shares, or 4 percent of its GM shares, leaving it with a 10.5 percent stake in GM.

The automaker has been the best performer among components of the Dow Jones industrial average in 2006, as shares rose just less than 60 percent year-to-date through the close Monday. The company reported a large net loss in the second quarter as it took charges related to trimming staff and selling its GMAC finance unit, but it also reported an operating income of $1.2 billion, far better than had been forecast by analysts.

Still some have suggested the company's shares may have reached a peak after its rise so far this year.

JP Morgan downgraded GM shares Thursday to a "neutral" recommendation from an "overweight" or buy rating, following a similar downgrade Monday by Bear Stearns.

JP Morgan auto analyst Himanshu Patel wrote in his downgrade note to clients that while he thinks GM might still be able to top his current forecast of earnings per share of $4.35 in 2007, he thinks traditional price-earnings ratios for auto stocks mean that "a mid-$30 stock price would seem fairly valued."

He said that for the stock to see gains much above the current price range it would require the company to win concessions from the United Auto Workers when the current labor deal expires in September 2007.

"Too early to call, but we are cautiously optimistic that the next UAW contract will involve at least some concessions," he wrote.

M faces a number of challenges going forward. Its U.S. sales were down 14 percent in the first seven months of the year, taking its U.S. market share down 2.6 percentage points to 24.8 percent. While its global auto operations made a $362 million profit in the second quarter, the core North American operations still lost $85 million in the period. Shares of GM have slipped 6 percent since the high it reached the day it reported results.

And the company faces additional costs and risks as it tries to reach a deal with the United Auto Workers union and bankrupt auto parts maker Delphi, a former GM unit. But a bankruptcy court hearing that had been set in New York for Thursday afternoon to consider Delphi's request to void its labor deals was once again postponed, to 10 a.m. Friday.

The union has vowed a crippling strike against Delphi that would also quickly halt operations at GM if the contracts are voided. Spokesmen for GM and Delphi said talks were going into the night Wednesday ahead of the hearing, which has been postponed several times. The company officials were not available Thursday morning to comment on the latest postponement in the hearing.

Activist shareholder Kirk Kerkorian, GM's largest individual shareholder with a 9.9 percent stake in GM, left his holdings in GM unchanged during the quarter. In June Kerkorian pushed GM to explore selling a minority stake in the company to Nissan and Renault, and the top executives from the companies held talks in July. GM has said it will explore whether to join the Nissan-Renault alliance over the next few months.

State Street Corp. owns the biggest stake in GM, with 15.4 percent of its shares outstanding. State Street added 400,000 shares during the quarter, according to an earlier filing.

Deal or no deal: Big risks for GM