Tomahawk, WI 8/09/2013 (Basicsmedia) – General Motors Company (NYSE:GM) has been designing, manufacturing, marketing and selling cars, trucks, crossovers and automobile parts and accessories all over the world since 1908 when it was founded. The company uses Detroit, Michigan as its headquarters from where this huge international business is run from. It has employed more than 200,000 employees on full time basis. The question we need to ask and answer is; should investors buy or sell its stock in 2013?

How Did GM’s IPO Go?

GM issued its IPO in November 2010, and until that time, there hadn’t been anything as close to what the company came up with. The company successfully raised more than $20 billion from its IPO. But why did GM take this route? It is good to remember that the company wasn’t immune to what went on in the financial sector. When the financial crisis of 2008 occurred, GM was also affected and it received help in the form of bailout from the federal government to the tune of $50 billion. The IPO was the only way in which GM could raise money to repay this bailout.

Factors Responsible for GM’s Upturn in Fortunes

GM has a number of factors which work to its favor. Its decision to invest heavily on product development has started paying off. Two of its products, namely, the Chevrolet Silverado and the GMC Sierra have encountered a huge demand from the market where customers have fallen in love with them. In terms of sales the company has been reporting a year on year increase of around 9.1%. By the end of the year, the company hopes it that it will have successfully launched close to 25 vehicles in to the market, which could in turn see an increase in revenue.

GM’s auto sales are quite impressive, and this is because of the brand awareness which it enjoys, as well as huge demand for its products in the market. An example is where in 2012, the company saw is auto sales jump to between 15-15.5 million worldwide. In the same year, GM had cash flow of around $24 billion, while it enjoyed credit facilities to the tune of $11 billion. These are just but a few factors which played a major role in terms of helping to improve the fortunes of GM which had looked bleak a few years ago during the global financial crisis.

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Image shows GM’s Share of the light vehicles market.

Image is courtesy of www.blog.polk.com

From the look of things, I would say that GM appears to have turned the bad situation around and is on a positive path. However, it still has to contend with a lot of competition in the form of Tesla Motors, Toyota and Honda, which are performing just as well, if not better than GM. It has yet to make inroads into the European market, but it has instituted measures to help it out in this regard. It may yet suffer in the area of labor, ad this will be felt more when it embarks on massive layoffs in Europe.

If you were to ask me, I would strongly advice you to buy GM stock. The company is on the right track in many aspects.

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