A slow, steady comeback has continued for General Motors (GM), with May sales up 3% year-over-year, the best month of total sales since September 2008. Further, the stock itself remains cheap given GM's potential for sales and earnings growth.
New car sales for the industry as a whole grew double digits last year, lending additional credence to GM's recovery and potential.
And now, GM is revamping its lineup, redesigning the Malibu and the Impala, and launching more competitive (i.e. lower fuel consumption) vehicles in the North American market.
But GM is also looking outside the U.S., and is pressing its position as the largest U.S. car company (by market share) in China to boost exports into emerging markets by 70% this year.
Looking ahead, analysts believe that the company's estimated $37 billion in liquidity should insulate the auto giant from any potential hiccups in the economy.
Technically, when GM began trading once again in November 2010 — at 34 — the stock's reception on Wall Street was chilly at best. After treading water for a few weeks, the bottom fell out and the stock plunged to $19 by October 2011. And it was at the same level in July 2012!
But shares have since stabilized, embarking upon a stable uptrend along support at their 10-week and 25-week moving averages. In fact, GM has not closed a week below this duo since August 2012.
Shares have seen a recent influx of strength, with buyers jumping on board after GM bested resistance at 30 in late April and now hovering just below their next technical hurdle at $35.
Given the stock's recent run, we don't advise chasing it, but taking small bits on short-term weakness could put you in fine position to take advantage of GM's next upleg.
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